Charities Act 2013
No. 100, 2013
An Act to define charity and charitable purpose, and for related purposes
Contents
Part 1—Preliminary
1 Short title
2 Commencement
3 Definitions
4 Government entity
Part 2—Definition of charity
Division 1—Definition of charity
5 Definition of charity
Division 2—Purposes for the public benefit
6 Purposes for the public benefit
7 Certain purposes presumed to be for the public benefit
8 Relief of necessitous circumstances
9 Purposes of entities that receive, hold or manage benefits that relate to native title etc.
10 When public benefit test does not apply
Division 3—Disqualifying purpose
11 Disqualifying purpose
Part 3—Definition of charitable purpose
Division 1—Definition of charitable purpose
12 Definition of charitable purpose
13 Funds that contribute to charity‑like government entities
Division 2—Types of charitable purpose
14 Purpose of advancing health
15 Purpose of advancing social or public welfare
16 Purpose of advancing culture
17 Purpose of advancing the security or safety of Australia or the Australian public
Part 4—Miscellaneous
18 Cy pres and similar schemes
Charities Act 2013
No. 100, 2013
An Act to define charity and charitable purpose, and for related purposes
[Assented to 29 June 2013]
Preamble
The Parliament of Australia recognises the unique nature and diversity of charities and the distinctive and important role that they play in Australia.
Until now, the meaning of charity in Commonwealth law has largely been that of the common law, based on the preamble to the Statute of Charitable Uses 1601.
Modern, comprehensive, statutory definitions of charity and charitable purpose, applying for the purposes of all Commonwealth law and ensuring continuity by utilising familiar concepts from the common law, will provide clarity and certainty as to the meaning of those concepts in contemporary Australia.
The Parliament of Australia enacts:
Part 1—Preliminary
1 Short title
This Act may be cited as the Charities Act 2013.
2 Commencement
This Act commences on 1 January 2014.
3 Definitions
(1) In this Act:
advancing includes protecting, maintaining, supporting, researching and improving.
disqualifying purpose has the meaning given by section 11.
entity has the meaning given by the Australian Charities and Not‑for‑profits Commission Act 2012.
government entity has the meaning given by section 4.
human rights has the meaning given by the Human Rights (Parliamentary Scrutiny) Act 2011.
Indigenous individual means an individual who is:
(a) a member of the Aboriginal race of Australia; or
(b) a descendant of an Indigenous inhabitant of the Torres Strait Islands.
public benefit, in relation to a purpose, has the meaning given by section 6.
purpose of advancing culture has a meaning affected by section 16.
purpose of advancing health has a meaning affected by section 14.
purpose of advancing social or public welfare has a meaning affected by section 15.
purpose of advancing the security or safety of Australia or the Australian public has a meaning affected by section 17.
(2) To avoid doubt, the definitions of terms in this section do not apply…
Overview
The Charities Act 2013, enacted by the Parliament of Australia, was introduced to address the need for a modern, comprehensive, statutory definition of charity and charitable purposes, ensuring clarity and continuity in contemporary Australia. Until this Act, the meaning of charity in Commonwealth law was largely based on the common law from the Statute of Charitable Uses 1601. This legislation seeks to provide statutory definitions that apply across all Commonwealth laws, addressing the gap in modern statutory definitions while utilising familiar concepts from the common law. The policy objective behind the Act is to provide a clear statutory framework that defines what constitutes a charity and charitable purposes, thereby enhancing the understanding and regulation of charitable activities within Australia.
Scope and Application
The Charities Act 2013 applies to the definition and recognition of charities and charitable purposes under Commonwealth law. It applies to entities that are not-for-profit, have purposes that are charitable and for the public benefit, and do not have any disqualifying purposes. It excludes individuals, political parties, and government entities from being charities. The Act applies to the entire Commonwealth of Australia. Certain exemptions and exclusions are provided for open and non-discriminatory self-help groups, closed or contemplative religious orders, and purposes directed solely to Indigenous individuals where certain conditions are met. The Act may be extended or modified through subordinate legislation, such as legislative instruments that can prescribe certain types of entities for the purposes of defining a government entity.
Key Provisions
- The Charities Act 2013 (the "Act") provides a statutory definition of "charity" and "charitable purpose" for the purposes of all Commonwealth law. Section 5 defines a charity as a not-for-profit entity with purposes that are charitable and for the public benefit, and that are not disqualifying purposes. Section 12 defines a charitable purpose as any of the purposes listed in subsection 12(1), including the purposes of advancing health, education, social or public welfare, religion, culture, human rights, the security or safety of Australia or the Australian public, and promoting reconciliation, mutual respect and tolerance between groups of individuals in Australia.
- The Act imposes certain obligations on entities seeking to be considered charities. They must be not-for-profit entities, their purposes must be charitable and for the public benefit (unless certain exceptions apply), and their purposes must not be disqualifying purposes. The Act also requires that charities have governing rules, and that their activities and other relevant matters be taken into account in determining their purposes.
- Breach of the Act may have civil and/or criminal consequences. For example, section 11 defines a disqualifying purpose as the purpose of engaging in or promoting activities that are unlawful or contrary to public policy, or the purpose of promoting or opposing a political party or a candidate for political office. Engaging in or promoting a disqualifying purpose may result in the loss of charitable status and tax-exemption. In addition, certain provisions of the Act are also offences, for example the offence of misusing charitable funds under section 46 of the Act, which carries a maximum penalty of 10,000 penalty units (currently AUD 1.87 million).
- Overall, the Charities Act 2013 seeks to provide clarity and certainty as to the meaning of charity and charitable purpose in contemporary Australia, by providing statutory definitions that apply for the purposes of all Commonwealth law. Entities seeking to be considered charities must meet certain requirements, and breach of the Act may have civil and/or criminal consequences.
- Area of Law
- Charity Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Purposes for the Public Benefit
- Regulatory Standards