To be registered as a charity, your organisation must have a charitable purpose or purposes. Your organisation’s ‘purpose’ is what your organisation has been set up to achieve. Some people also refer to this as their organisation's mission.
How we decide if your purposes are charitable
When you apply to register your organisation as a charity, you need to demonstrate its charitable purpose. Generally, the ACNC will decide what your organisation's purposes are by looking at:
- your organisation’s governing documents (for example, its constitution, rules or deed) – these usually set out its purpose or ‘objects’
- other types of evidence, such as your organisation's activities, annual reports, financial statements and corporate documents.
Some activities may not seem to be charitable, but are appropriate if they are to further a charitable purpose. For example, your organisation may have activities designed to raise money so it can pursue its charitable purposes.
Example: An organisation that provides accommodation for homeless youth operates a recycled clothing shop, where the profits raised are used to provide this accommodation.
What happens after we decide your purposes are charitable
Once we decide your organisation’s purposes are charitable, and that it is otherwise eligible, we register your charity. When we register it, we register it as a ‘subtype’ of charity, which reflects its purpose or purposes (for example, as a charity advancing education).
The subtype or subtypes of charity we register your charity as can affect the tax concessions that may be available to it. You may be required to provide further information to support an application for particular subtypes of charity, such as a public benevolent institution or health promotion charity.
What we recognise as charitable purposes
'Charitable purpose' has a special legal meaning, developed over the years by the courts and parliament. The courts have recognised many different charitable purposes, and as society changes new charitable purposes are accepted.
The Charities Act 2013 (Cth) lists twelve charitable purposes:
- advancing health
- advancing education
- advancing social or public welfare
- advancing religion
- advancing culture
- promoting reconciliation, mutual respect and tolerance between groups of individuals that are in Australia
- promoting or protecting human rights
- advancing the security or safety of Australia or the Australian public
- preventing or relieving the suffering of animals
- advancing the natural environment
- promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a state, a territory or another country (where that change furthers or opposes one or more of the purposes above), and
- other similar purposes ‘beneficial to the general public’ (a general category).
For more information, see our examples of charitable purposes.
Purposes that the law recognised as charitable before the Charities Act came into effect will continue to be charitable. The charity subtypes of public benevolent institution and health promotion charity also continue to be recognised.
Charities can have more than one charitable purpose
Your organisation may have more than one charitable purpose. For example, your organisation may educate the public about the environment, and so advance education as well as the environment.
The law requires all of your organisation’s purposes to be charitable, except for purposes that are ‘incidental or ancillary to’ (further or aid) the charitable purposes.
Your organisation may have more than one purpose, and many activities, and still be a charity, as long as these all further the charitable purpose.
If your organisation has non-charitable purposes and these do not further its charitable purposes, your organisation is unlikely to be registered as a charity.
Some purposes are not recognised as charitable
Some purposes may benefit the community, but not fit the legal meaning of charitable purpose. For example, your organisation may not fit the legal meaning of charity if it is a:
- social club – unless its main purpose is charitable such as to help people who are socially isolated or disadvantaged, and the club’s social activities are the way it achieves this purpose
- sporting and recreational organisation – unless its main purpose is charitable such as providing sporting activities for the people with disabilities or the elderly
- professional or trade group – unless its main purpose is charitable, such as advancing education.
These organisations may still:
- be not-for-profits and exempt from income tax, or
- qualify as charities under state or territory laws.
However, they are unlikely to fall within the general legal meaning of charity as we apply it.
Some purposes cannot be charitable
Some purposes are deliberately disqualified from being charitable, such as the purposes of:
- engaging in or promoting activities that are unlawful or against public policy, or
- promoting or opposing a political party or a candidate for political office.
Unlawful activities would include being engaged in tax evasion, people or drug trafficking, dealing in weapons or illegal goods. In some cases, a charity may be set up for charitable purposes but be used to hide or transfer money that has been gained illegally.
In these cases, the organisation is not a charity because its activities show that its true purpose is to engage in unlawful activities.
Activities that are against public policy
It is not against public policy to have a purpose of advocating for a change in government policy or law, or from promoting a law or policy – in certain situations these may be charitable purposes, for example advancing public debate on a charitable topic.
An example of an activity against public policy would be educating people in how to build illegal weapons. Even though education is a charitable purpose, it would not be a charitable purpose to educate people in a way that may put members of the public at risk.
Purpose of promoting or opposing a political party or candidate
An organisation that has a purpose of promoting or opposing a political party or candidate for political office cannot be a charity. For example, an organisation that exists to fundraise for the election of a political candidate is not a charity.
Charities can engage in some policy debate
Charities can still distribute information or engage in debate about the policies of political parties or candidates, where these activities must be ways of achieving their charitable purposes.
For more information, see our guidance on advocacy by charities.