Australian charity commission to crack down on inappropriate political activities by charities

March 18, 2017 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, Canadian Charity Law, Global Giving

This recent article in The Guardian entitled Charity regulator to crack down on political advocacy after complaints discusses how the Australian Charities and Not-for-profits Commission (ACNC) has cracked down on certain political activities by charities in Australia and how the ACNC is asking for less secrecy and more transparency in dealing with charity compliance issues.

Here is a link to the ACNC Charity Compliance Report 2015 ­ 2016.

In terms of political activities:

In April 2016, the ACNC published a new piece of guidance titled Charities, elections and advocacy to ensure charities are aware of their obligations and can address potential noncompliance where identified. In the period leading up to, during and following the 2016 federal election, the ACNC received an increased number of concerns regarding political advocacy.  Over the past two years the ACNC has received 27 concerns about 21 charities as to whether they were operating with a disqualifying purpose. The complaints have originated from various sectors of the community, with concerns linking charities to a range of political parties or activities that may be unlawful or contrary to public policy. The subtypes of these charities include purposes relating to the protection of animals and the environment, advancing religion, education, and health and employment. The ACNC always considers concerns based on the facts and evidence available, and will determine what action (if any) it is necessary to take. Seven charities were subject to investigation where information suggested that they may have a disqualifying purpose of promoting or opposing a political party or a candidate for political office. 

The report notes that reference to political activities is either illegal activities or activities contrary to public policy or support/opposition to a candidate or political party.

Political activities

We will continue to investigate concerns that relate to activities that may disclose a disqualifying purpose. This includes the purpose of engaging in, or promoting, activities that are unlawful or contrary to public policy. It also includes the purpose of promoting or opposing a political party or candidate for political office. 

In terms of secrecy, Susan Pascoe, the Commissioner of the ACNC writes:

"Our secrecy and privacy provisions limit the information that can be publically released. This has made it difficult to communicate the actions we have taken following individual investigations and the underlying evidence supporting such decisions. We hope that this issue may be considered in the statutory review of the ACNC Act which is due to be carried out on or after 3 December 2017."

I could not agree more.  I have been making the same point here in Canada for many years. For example my submissions to the Department of Finance in 2016.

The report also notes on secrecy:

Secrecy provisions

Division 150 of the ACNC Act sets out secrecy provisions that prevent the ACNC from providing information to complainants about how specific concerns have progressed. However, where the ACNC does investigate a charity and finds noncompliance has occurred, the ACNC will put some matters on the public record. For example, certain details will be published on the Charity Register where the ACNC:

■ revokes the charity’s registration (noting the details on the Charity Register will include the charity’s revoked status); and

■ uses its enforcement powers, such as issuing a warning or direction, or accepting an enforceable undertaking given by the charity.

The secrecy provisions generally prevent the ACNC from explaining specifically to the public why we have taken action against registered charities. However, if inaccurate or incomplete information is made public by a charity regarding the ACNC’s compliance actions, we will correct the record. We will do so in a way that does not disclose personal information.

Example: A charity has its registration revoked due to serious misconduct following an ACNC investigation. The charity is approached by the media and provides a false statement. False statements include stating:

■ the revocation was merely an administrative matter

■ the revocation was a result of the charity failing to provide a form

■ the charity itself requested a voluntary revocation

In these circumstances, the ACNC will issue a statement to the media to correct the record. This statement would explain the charity’s registration was in fact revoked due to breaches of the ACNC governance standards and not for the reasons given by the charity. 

Although the ACNC is chaffing under the secrecy provisions it is interesting that those provisions actually give them far more of an ability to discuss a particular charity's situation.  At least the ACNC has certain powers and "if inaccurate or incomplete information is made public by a charity regarding the ACNC’s compliance actions, we will correct the record. We will do so in a way that does not disclose personal information."  Unfortunately, CRA cannot do that.

The article notes:

Pascoe said the ACNC was subject to strict secrecy provisions that prevented it discussing its work in great detail. That meant the regulator was only able to publicly release aggregated data and de-identified case studies.

It can name groups who have had their charity status revoked but is unable to give any detailed description of their wrongdoing.

She said that was particularly frustrating when dealing with complaints about political activity. 

“We find it frustrating as the regulator but also if you had listened in to Senate estimates recently; the political parties also find it very frustrating, particularly as it relates to political advocacy,” Pascoe said.

“They want us to investigate what they believe are breaches and they are very frustrated when we are unable to provide straight answers,” she said. 

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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