What Is a “Charitable Purpose” Under the Associations Incorporation Act?

“Charitable purpose” is the hinge on which public benefit status turns. The Act gives it a wide statutory meaning rather than leaving it to the old common law of charity, and the choice of words repays attention.

Wider than the common law

The common law inherited at Independence recognised four heads of charity: relief of poverty, advancement of education, advancement of religion, and other purposes beneficial to the community. Section 5 keeps all four and adds items that the common law reached only by argument: art, science, health, cultural welfare, agriculture and conservation are named outright. The word “includes” keeps the list open, and the closing words, “other objects beneficial to the public at large”, sweep in whatever else serves the public. The same list appears in the definition of “prescribed qualifications for incorporation” in section 3 of the Associations Incorporation Act 2023, which is why an association with any of these purposes qualifies to incorporate at all.

Amateur sport

Sport by itself was not charitable at common law. Section 5(2) provides that “the promotion of amateur sport may be a charitable purpose if it is the means by which a charitable purpose referred to in Subsection (1) is pursued”. A rugby league association whose object is to promote the game for its clubs and players is a member benefit association. A body that runs sport in schools to advance education, or in settlements to advance health and youth welfare, may be a public benefit association. The objects clause in the rules should say which, and the tick-box in the notice of intention must match.

Religion

Section 5(3) removes a doubt that has troubled churches elsewhere: “the promotion of religion may be a charitable purpose even if the incorporated association only benefits the members of a particular faith”. A congregation, a mission, a diocese or a council of churches can therefore be a public benefit association although its services are for its own adherents. The definition of “association” in section 3 expressly mentions a “Christian mission”, and section 71(3) allows the rules of “a church (or council of churches)” to set their own procedure for expelling members.

Ancillary non-charitable purposes

Many public benefit bodies also lobby, campaign or comment. Section 5(4) provides that if an association “includes a non-charitable purpose (for example, advocacy) that is merely ancillary to a charitable purpose, the presence of that non-charitable purpose does not prevent the incorporated association from qualifying for registration as a public benefit association”. Section 5(5) defines “ancillary”: the purpose must be “ancillary, secondary, subordinate, or incidental to a charitable purpose” and “not an independent purpose”. A health NGO that advocates for better hospital funding remains charitable; an organisation whose main object is political advocacy is not, though it may still incorporate as a member benefit association or, if it is a party, register under the Organic Law.

Why the definition matters

• Category. Only an association formed for a charitable purpose that benefits the public interest can be a public benefit association. Choosing that category when the purpose is not charitable is a ground of objection under section 9(1)(g).
• Surplus assets. Under section 143(4) the surplus of a public benefit association on winding up “may only be distributed to another public benefit association”, and under section 102(2) its donations and grants must stay in charitable hands on any amalgamation.
• Trust property. Section 14(2)(b) lets an association hold property on trust, and section 37 lets the National Court authorise disposal of trust property when the trusts have ended or become onerous, a power drawn from the law of charitable trusts.
• Funding and tax. Grant-makers and the tax law apply their own tests of charity, which may be narrower than section 5. Public benefit status under this Act is a necessary but not sufficient step towards those.

Writing the objects clause

The Schedule to the Act requires the rules to state “the objects and purposes of the association”. For a public benefit association the clause should track the language of section 5: name the charitable purpose, describe the public who benefit, and describe any advocacy or trading as ancillary means to that end. Objects that read as serving the members, or as making money, invite an objection or a refusal, and an association cannot later change its objects without a special resolution registered by the Registrar (section 21). The article on rules covers the rest of the Schedule.