About the organisation
A community arts organisation applied for charity registration with ACNC with the subtype advancing culture.
The organisation’s activities included hosting and supporting a series of arts programs and initiatives for community members of all ages and backgrounds.
About the application
The organisation’s application included information about its finances and explained how sponsorships with local businesses, as well as the sale of memberships, funded its work.
In their application, the organisation also provided details about the calendar of events and programs it ran each year to engage the community and support local art.
Included on the calendar was one exhibition that was for members only. The ACNC contacted the applicant to understand more about its calendar of events and the members-only event. If an organisation is mainly benefiting its members, it may not be a charity for the public benefit – but rather for the private benefit of members.
An organisation cannot be a charity if it exists for private benefit. Charities must be for the public benefit, which means that they must benefit the general community.
Individuals can and do benefit from charity activities. That benefit is acceptable - and often unavoidable - as long as it occurs as a product of (or incidentally to) advancing the charitable purpose, rather than as a goal of a charity's activities. The organisation’s focus should be on its purposes.
About the registration process
The ACNC reached out to the organisation to understand more about its activities and about the members-only exhibition.
In response, a representative of the organisation explained that the membership limitation of the exhibition was only on who could exhibit, not who could attend.
The ACNC also wanted to understand if there were any restrictions on who could be a member of the organisation – often referred to as ‘restrictive membership’.
A charity may restrict its benefits to a particular class or group of people as long as:
- the class is not closed, and
- the restriction advances its charitable purpose.
For example, an organisation whose purpose is to help refugees can make its services specifically available to all refugees and not to the general public.
The organisation can do this and still be a charity because its services are available to all refugees (so the class is not closed), and the restriction relates to its charitable purpose.
However, an organisation may not be a charity if it is too restrictive on who can receive benefits, and the Charities Act guides what is acceptable or not in this regard.
For example, an organisation established to provide scholarships to the employees of a specific company is unlikely to be a charity because the class of beneficiaries is closed (with beneficiaries linked by ties to a single individual or company).
Upon further discussion, the organisation told the ACNC that while that particular exhibition was for members only, anyone was able to join the organisation as a member. In addition, the members-only exhibition was also open to the public to attend.
This meant that despite the limitation on who could exhibit, the benefit to the community remained – members of the public could still attend the event and engage with art and culture.
In speaking to the organisation and reviewing its annual calendar of events, it was also clear that artists who did not wish to become members still had ample opportunity to exhibit with the organisation at other times throughout the year.
Outcome
The ACNC determined that the organisation’s purposes were charitable and for the public benefit, and that while individual members benefited from the members-only exhibition, the organisation’s purposes were nonetheless for the public’s benefit.
The ACNC registered the organisation as a charity with the subtype of advancing culture.