Women’s Life Centre decision: AAT endorses ACNC’s approach to public benevolent institution eligibility

Registered charities are required to register under one or more charity ‘subtypes’ with the Australian Charities and Not-for-profits Commission (ACNC). There are numerous subtypes, with each offering associated tax benefits and concessions. An organisation’s objects and activities must be directed towards achieving the charitable purpose described by the relevant subtype, before registration by the ACNC.

Relevantly, charities registered under the public benevolent institution (PBI) subtype are eligible to apply for registration as deductible gift recipients, allowing donors to claim tax deductions for donations to the charity.

In Women’s Life Centre Inc and Commissioner of the Australian Charities and Not-for-profits Commission (Taxation) [2021] AATA 500, the Administrative Appeals Tribunal affirmed the ACNC’s decision to reject an application by Women’s Life Centre Inc (WLC) for registration under the PBI subtype. This decision endorses the ACNC’s current approach to determining PBI eligibility.

Background

WLC provides services to women in need facing a ‘crisis pregnancy’.

WLC sought registration as a charity under various subtypes, including the PBI subtype. The ACNC declined to register the organisation under the PBI subtype, instead registering it under the ‘advancing health’ and ‘advancing social or public welfare’ subtypes. WLC objected to this decision, however it was affirmed by the ACNC in July 2019.

WLC subsequently sought a review of the ACNC’s decision before the AAT. The Tribunal was required to consider whether WLC, at the time it made its initial application, met the description of a PBI.

Meaning of ‘public benevolent institution’

As the phrase ‘public benevolent institution’ does not have a technical legal meaning, the Tribunal was required to consider its meaning at common law.

The Tribunal considered each word of the expression. The ACNC Commissioner accepted that WLC was ‘public’ and an ‘institution’. The point of contention in this case was whether WLC was ‘benevolent’.

The Tribunal affirmed the meaning of ‘benevolent’, as established by existing case law. The Tribunal noted that WLC was required to demonstrate that its services were provided to women who experienced the type of unmet need (poverty, distress, suffering or misfortune) referred to in Perpetual Trustee Co Ltd v Commissioner of Taxation (1931) 45 CLR 224 and Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute (1990) 90 ATC 4752. Additionally, the Tribunal highlighted that the services needed to be precisely targeted towards providing relief to the relevant individuals, as opposed to pregnant women more generally.

WLC’s character

To determine WLC’s character at the time of the original decision, the Tribunal considered its governing documents and other evidence of its activities.

WLC’s constitution states that its principal objective is to ‘provide relief of poverty, suffering, distress, misfortune, destitution, misfortune [sic] or helplessness for pregnant women and mothers of all sections of the public irrespective of race, colour or creed.’

WLC’s other objectives include:

• providing counselling for women facing a crisis pregnancy
• offering support to women in need during pregnancy and after childbirth
• other related purposes.

The Tribunal accepted that WLC’s principal objective was consistent with the description of a PBI. It also noted that the other objectives were generally consistent with (and ancillary to) the principal objective however the reference to ‘crisis pregnancy’ raised concerns.

The Tribunal sought to determine the meaning of ‘crisis pregnancy’. Evidence suggested that the concept was not clearly defined and encompassed a range of situations in which pregnant women might experience uncertainty and anxiety.

It was unclear whether all or even most of the women accessing WLC’s services were experiencing the type of unmet need required to establish that WLC was a ‘benevolent’ organisation. The Tribunal found that the services being provided by WLC did not appear to be targeted towards meeting those unmet needs, and were instead directed towards pregnant women more generally, including pregnant women who may simply be feeling unease or uncertainty.

Additionally, evidence suggested that WLC’s activities were outside the scope of its written objects and relevantly, outside the concept of a PBI.

Outcome

The Tribunal was not satisfied that WLC was geared towards providing relief from poverty, distress, suffering or misfortune. WLC failed to establish:

• how the women who used WLC’s services were in need in the sense described in the case law
• how the services were directed to those in need, as opposed to being made generally available to individuals who were not obviously in need.

Accordingly, WLC failed to meet the definition of ‘benevolent’ in the context of a PBI, affirming the ACNC’s decision.

Key takeaways

This case emphasises the importance of ensuring that:

• your governing documents reflect the actual activities carried on by your organisation
• in the case of a PBI application, your activities are directed and provided to those in need.

Organisations looking to gain PBI status should carefully consider the scope of their objects and activities and the individuals to whom their services should be provided.

Please contact a member of our corporate advisory team for further details of any of the matters discussed in this article.