About the organisation
An organisation applied to the ACNC for charity registration.
The organisation’s governing document stated that its purpose was to alleviate the financial distress of a person experiencing necessitous circumstances, and that because of the cost associated with managing their health conditions, they were unable to afford everything they needed in order to have a modest standard of living.
To achieve its purpose, the organisation stated it would provide financial help to the person in question.
About the application
The organisation applied to be registered with the subtype advancing health.
The organisation’s governing document contained clauses requiring it to operate on a not-for-profit basis, and to provide surplus assets to a charity upon winding up.
The organisation’s governing document and submissions also demonstrated compliance with the ACNC Governance Standards.
The term 'necessitous circumstances' refers to financial necessity. A person is in necessitous circumstances where they don't have enough financial resources to have a modest standard of living in Australia.
For an organisation to have a charitable purpose of relieving necessitous circumstances, it must only provide, via funds or goods, assistance to people who would otherwise lack what they need to have a modest standard of living in Australia.
This purpose is still charitable even if it is directed to the relief of the necessitous circumstances of one, or very few, people and not to the general public or a sufficient section of the general public.
The people eligible to benefit can be specified by name but do not need to be.
About the registration process
The ACNC was satisfied that the organisation:
- was a not-for-profit entity, and
- complied with the ACNC’s Governance Standards.
However, other aspects of the application raised potential concerns. We needed more information about these before we could register the organisation as a charity.
Charity subtype
An organisation is entitled to registration with a particular subtype of charity if it has a charitable purpose that corresponds with that subtype.
‘Advancing health’ is a charitable purpose that encompasses ‘preventing or relieving sickness, disease, or human suffering’.
In this case, the organisation was applying for charity registration under the subtype advancing health by looking to prevent or relieve sickness, disease or human suffering.
However to meet the subtype requirements, the purpose of advancing health must also be for the public benefit and be available to the public, or a ‘sufficient selection’ of the public. As the organisation’s work was only benefitting one individual, its purpose was not for public benefit.
This meant the organisation did not have a charitable purpose of advancing health that was for the public benefit.
However, the ACNC identified another purpose – ‘advancing social or public welfare’ – that encompasses providing relief to people experiencing poverty, distress, or disadvantage. This includes people in necessitous circumstances.
A charity with one of these is entitled to registration as the charity subtype of ‘advancing social or public welfare'. Ordinarily this purpose must also be for the public benefit. But where the organisation’s purpose is relieving the necessitous circumstances of one or more Australians, the requirement that a purpose benefit the public – or a sufficient section of the public – does not apply.
As a result of discussions with the ACNC, the organisation withdrew its application for registration with the charity subtype of ‘advancing health’ and instead applied to be registered with the subtype of ‘advancing social or public welfare’.
To be registered as a charity, a not-for-profit must have charitable purposes that are ‘for the public benefit’.
A charity's purpose is considered to be for the public benefit if achieving that purpose would be of benefit to the general public, or to a 'sufficient section of the general public'.
However, there are situations where the public benefit test is limited or does not apply.
For organisations relieving the necessitous circumstances of people who are in Australia, the benefit does not have to be directed to the general public, and can be directed to one or more people.
Outcome
The ACNC registered the organisation as a charity with the charity subtype of ‘advancing social or public welfare.’