This is just the second case where a decision of the Australian Charities and Not-for-profits Commission (ACNC) has been appealed in the Courts. Two cases in nearly a decade will probably rise sharply this year with several other cases making their way from the Court system. In this case, while the ACNC was willing to register the organisation as a charity, it refused to concede it qualified as a Public Benevolent Institution (PBI).
The Women’s Life Centre Inc (WLC) was established in 2013 and operated in the Albury region of New South Wales. WLC’s constitutional object was copied from an unrelated Western Australian organisation being:
“The principle [sic] objective of the organisation 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 founder established WLC as part of her Catholic faith-based stance on abortion and stated that her aim was to deal mainly with ‘crisis pregnancy’, which WLC defined as ‘a pregnancy which is neither planned nor desired by the woman concerned and which represents a personal crisis for her’. While the work of WLC was mainly carried out by volunteers some financial support was received from the Catholic Diocese of Wagga Wagga and other Catholic entities over several years. Her spouse, a medical practitioner was also involved as a volunteer.
The Administrative Appeals Tribunal (Tribunal) noted that the term ‘public benevolent institution’ is not defined in the relevant legislation, but defined through previous case law. In this instance, the Tribunal agreed that WLC qualified as being ‘public’ and an ‘institution’. The issue in contention was whether WLC was ‘benevolent’. Their review of the case law indicated that a public benevolent institution is one which provides relief for those who are sick, suffering, helpless or in distress, or subject to misfortune or to the disabilities of the aged or the young.
The ACNC’s position was that WLC had multiple purposes separate from the purpose of meeting a need of the kind referred to in the relevant cases on the meaning of ‘benevolent’. It claimed there was evidence of an additional purpose – persuading women not to have an abortion and that family planning advice and education was, strictly speaking, unrelated to the principal purpose of WLC.
The Tribunal decided that the term ‘crisis pregnancy’ was ill-defined in evidence given and could embrace a wide range of circumstances for a wide range of women. The Tribunal said:
It is difficult to be confident all or even most of the women who use the services will experience the sort of unmet need – that is, poverty, distress, suffering and/or misfortune – referred to in Perpetual Trustees and Cairnmillar. Second, even if we assume many women experiencing a ‘crisis pregnancy’ also have an unmet need of the kind referred to in those cases, the services provided by WLC do not appear to be precisely targeted towards providing relief to those individuals, as opposed to pregnant women more generally. The services appear to be available to all women who ask for assistance, including pregnant women who might simply be feeling unease or uncertainty. The lack of targeting would appear to be a problem…
The Tribunal mapped the differences between Commissioner of Pay-roll Tax (Vic) v Cairnmillar Institute (1992) 2 VR 706 where the institution provided ‘hospital clinical and counselling facilities for treating psychological spiritual and social disorders’ and Marriage Guidance Council of Victoria v Commissioner of Pay-roll Tax (Vic) (1990) 90 ATC 4770, where an approved marriage guidance counselling organisation under the Family Law Act 1975 (Cth) merely provided counselling services related to all aspects of marriage to members of the public.
The distinction between the cases is that the community does not regard those who are, or have been, in marriage, successful or unsuccessful, as a general category of people with an unfortunate disability or condition arousing compassion, whereas the clients of the Cairnmillar Institute receiving professional medical treatments did so.
The Tribunal concluded:
We accept some of the women who attended WLC’s premises might have been in need in the relevant sense. We accept those individuals may have benefitted in very practical ways from the well-meaning assistance provided by counsellors like [the founder]. The difficulty lies in the ambiguity of the concept of a ‘crisis pregnancy’. While broad, the evidence from the letter to donors in particular suggests the expression is laden with additional values that are not comfortably accommodated within the relatively narrow confines of the public benevolent institution.
The ACNC decision not to register WLC as a public benevolent institution was affirmed.
With the ACNC now conducting desk audits of PBIs on the charity register, it is worthwhile to consider the following arising from the case:
- Check your constitution for an appropriate principal objects clause – copying an objects clause from a similar organisation is not a guarantee of success.
- Consider collecting evidence of how your organisation, in a sense described in case law, provides relief for those who are sick, suffering, helpless or in distress, or subject to misfortune or to the disabilities of the aged or the young.
- Consider how your services are directed to those in need, as opposed to being made available more generally to the public who may not be obviously in need.
- If the above raises concerns, then seek professional advice about the mitigation of the situation. In some instances, it may be possible to restructure your activities into different entities to keep the PBI endorsed entity activities separate from general public charitable relief.