The Australian Charities and Not-for-profits Commission (ACNC) refused to register Equality Australia Limited (Equality Australia) as a public benevolent institution (PBI).

On appeal to the Administrative Appeals Tribunal (Tribunal), the Tribunal by a majority of 2:1, agreed with the ACNC that Equality Australia was not a PBI. The majority found that there was no ‘sufficient connection’ between Equality Australia’s advocacy for law reform and social change and the relief of the distress of LGBTQI+ people.

The Full Federal Court of Australia (Federal Court) in its judgment on Equality Australia and ACNC [2024] FCAFC 115 found no faults with Tribunal’s adoption of the ‘sufficient connection’ test for PBIs. As a matter of fact, it was reasonably open to the Tribunal to conclude that Equality Australia was not a PBI.

What is a PBI?

A PBI is an institution that is organised, conducted or promoted for the relief of poverty, destitution, helplessness, suffering, misfortune, disability or distress.

Examples of PBIs include some hospitals or hospices, soup kitchens, disability support services and aged care services. Other examples are fundraising organisations that promote or provide funds to other organisations for the relief of poverty or distress.

What was the main issue?

The question of ‘directness’ or ‘proximity’ often arises with PBIs and their provision of relief. PBIs do not need a “presence on the ground”, but can provide ‘indirect relief’, including through intermediaries.

The heart of the issue is the relationship between what an organisation does and the relief of its intended beneficiaries. Specifically, does Equality Australia’s advocacy work relieve the distress of LGBTQI+ people?

Why was Equality Australia not a PBI?

Upon considering various cases on PBI, the Federal Court agreed with the Tribunal’s understanding of the ordinary meaning of PBI. This includes a requirement that there must be a ‘sufficient connection’, rather than a mere ‘logical connection’ between the activities of a PBI and the relief of poverty or distress. This is a question of fact and degree based on the relevant circumstances.

The Federal Court found that the Tribunal did not make an error of law in denying Equality Australia its PBI status. It was open to the Tribunal to make a factual finding, including that there was no ‘sufficient connection’. While advocacy for law reform “may” relieve the distress of LGBTQI+ people, how likely it is to do so is a question of fact for the Tribunal.

What did the Federal Court say on the ACNC’s contentions?

The Federal Court declined to consider the contentions of the ACNC that the following aspects of Equality Australia’s activities made it ineligible to be a PBI:

a)    advocacy, education and campaigning for change in law, social practices and administrative policies;

b)    targeting activities to LGBTQI+ people generally, rather than specifically to those in distress; and

c)     activities inherently preventative in nature.

These matters remain uncertain and the ACNC’s contentions appear to be contradictory to the Commissioner’s Interpretation Statement on PBI.

How does this impact your organisation?

This judgment has implications for PBIs and organisations seeking charity registration as a PBI. If your organisation provides ‘indirect’ forms of relief, it must consider whether there is a ‘sufficient connection’ between its activities and the relief of its intended beneficiaries.

This is a particularly live issue for organisations that advocate for changes in law and social practices, which they claim are the most effective and impactful ways of providing relief in contemporary Australia.

The ACNC is funded to review 500 charities per year with deductible gift recipient status, including those that are PBIs. We expect the ACNC to pay close attention to registered PBIs undertaking activities of advocacy, education and campaigning for law reform and social change, and those that are focused on preventative activities.