A decision of the Australian Charities and Not-for-profits Commission that a not-for‑profit entity was not entitled to public benevolent institution status has been set aside.
The case of Global Citizen Ltd v Commissioner of ACNC  AATA 3313, involved an appeal by a not‑for‑profit entity to the Administrative Appeals Tribunal. Global Citizen Limited (GCL) works to eradicate poverty via various campaigns targeted at securing specific commitments from government, large corporations and wealthy philanthropists. For example, GCL participated in the polio eradication campaign in efforts to support the Global Polio Eradication Initiative (GPEI), which aims to eradicate polio worldwide. As part of this campaign, GCL:
- hosted parliamentary events and met with key officials
- wrote to the Prime Minister and Members of Parliament seeking commitments and funding
- created and circulated communications calling for action in support of increased funding for GPEI.
GCL’s work in the polio eradication campaign prompted significant contributions to GPEI by the Foreign Affairs Minister and the Australian Government. The contribution of GCL was acknowledged by letter from the Department of Foreign Affairs and Trade and GPEI.
GCL often works with other organisations to carry out activities as part of these campaigns.
GCL is a not-for-profit entity registered with the Australian Charities and Not-for-profits Commission (ACNC). Before this decision, GCL was registered in the subtype of ‘advancing education’. GCL applied to the ACNC Commissioner to be registered as a public benevolent institution (PBI) on the basis that it aimed to and had been actively working towards ending global poverty by the year 2030.
The Commissioner dismissed GCL’s application for registration as a PBI on the basis that:
- eradicating poverty was not GCL’s only purpose, nor was it the primary purpose (the purposes sub-issue)
- GCL did not provide relief directly to those in need but rather convinced governments and wealthy philanthropists to provide relief (the provision of relief sub-issue).
The decision on appeal
The Commissioner argued that relief of poverty or need was not GCL’s main purpose and, accordingly, it was not capable of registration as a PBI. The Commissioner posited that GCL had several independent purposes, including education and advocacy.
The AAT declined to determine a view on the meaning of ‘main’ purpose, instead opting to focus on the specific purpose or purposes of GCL.
The principal object of GCL, as described in its governing documents, is to provide benevolent relief of poverty, sickness, destitution, distress, suffering and helplessness to persons in need, with a particular emphasis on bringing an end to extreme poverty globally by 2030. GCL contended this was its only purpose and that its other objects are in aid of its main purpose.
The AAT drew an important distinction between the purpose for which an entity is established, and the activities that it may undertake to achieve that purpose.
The AAT considered GCL’s activities and held that, while GCL does undertake activities that involve raising awareness and education, these activities were conducted to achieve GCL’s main benevolent purpose, being the relief of poverty.
Turning to the Commissioner’s submissions, the AAT concluded that, even if education and advocacy were held to be purposes of GCL, this would not disqualify GCL from being recognised as a PBI, provided these purposes were incidental and ancillary to GCL’s main purpose of relieving poverty.
Provision of relief sub-issue
The Commissioner argued that the activities of GCL did not relieve poverty, either directly or indirectly, through related entities. It claimed any relationship between the activities of GCL and the provision of relief was ‘too remote’ and lacked the ‘causal link’ indicative of PBIs.
In opposition to this, GCL contended that it secured material commitments — whether financial, legislative, or on matters of policy — from governments and major philanthropists in efforts to relieve poverty.
The AAT expressly rejected the notion that, to be a PBI, an entity must provide relief directly.
In reaching this conclusion, the AAT interestingly noted that, where the entity provides relief indirectly, it may be more difficult to determine that the entity is ‘organised’ for, or ‘concerned in’ or ‘promoting’ the relief of poverty when compared to an entity that directly provides relief.
In this instance, the AAT ultimately determined that GCL was organised for the purpose of relieving poverty given that it undertakes a range of activities (albeit together with other organisation) so that funds are directed to international organisations that are involved in the direct delivery of aid and assistance in the relief of poverty.
What does this mean for charities looking to become registered as a PBI?
This case provides further clarity on key principles relating to PBIs, including the following:
- PBIs can have multiple purposes, some of which may be non-benevolent, provided their main purpose is benevolent.
- PBIs may provide relief indirectly and in connection with other organisations, although it may be more difficult to establish that an entity provides relief where this is done indirectly.
This decision also blurs the distinction between an entity that participates in the political process for the purpose of providing benevolent relief, and that which pursues political outcomes for its own sake. The former may still qualify as a PBI, however its involvement in the political process will be closely scrutinised.
The ACNC has indicated that it will not appeal the decision and will clarify any implications relevant for charities.