Charity arrangements fail to meet community expectations, RSA tells inquiry

Si Gladman / 22 June 2023

The Rationalist Society of Australia has urged the Productivity Commission to recommend the federal government take action on religious exemptions that undermine the integrity of the charities system.

In a submission to the Productivity Commission’s inquiry on philanthropy last month, the RSA called for the removal of the ‘advancement of religion’ as a charitable purpose.

The submission also urged the removal of exemptions which release Basic Religious Charities (BRCs) from financial reporting and compliance with the governance standards required of all other charities.

Read the full submission here.

RSA president Dr Meredith Doig told the Productivity Commission that these issues undermined the integrity of the not-for-profit sector and acted as barriers to increasing philanthropic giving in Australia.

Dr Doig argued that the exemptions for BRCs from having to submit financial reports meant the current system failed the ‘good policy design’ and the ‘community expectations’ tests, and also failed to align with community expectations.

In its consultation document, the Productivity Commission said it was seeking information relating to: “The extent that existing government support for philanthropy aligns with good policy design and community priorities, and examples where it may no longer align with community expectations.” 

As reported in December, government officials have noted that “potentially billions” of dollars are going unreported in the economy because BRCs – accorded charity status solely for ‘advancing religion’ – do not have to submit financial information to authorities and do not have to meet other governance standards.

In the submission, Dr Doig said all organisations that enjoy tax-exempt status should be obliged to demonstrate their activities are for the public benefit – as is now required in the United Kingdom.

She said the RSA supports charity status for organisations that conduct genuine charitable works for the public benefit in an accountable manner, regardless of whether that organisation is religious.

Even if the ‘advancement of religion’ head of charity were to be removed in Australia, religious charities that do genuine work in the public benefit – of which there would be many – would continue to qualify for charity status under another head of charity, such as ‘relief of poverty’ or ‘advancement of community welfare’,” she said.

“The 12 charitable purposes set out in the Charities Act 2013 (Cth) include ‘advancing religion’. Australia inherited this ‘charitable purpose’ from English law, which had its origins more than 400 years ago – a very different time and place to modern 21st-century Australia.

“The inclusion of ‘advancement of religion’ may or may not have been appropriate in 1601 when there was a state religion in England, and even perhaps in 1894 when most people in Britain adhered at least nominally to Christianity and most charity work was religion-based, but it is hardly appropriate today when we live in a multicultural and multi-belief society, with an increasingly non-religious citizenry.”

Dr Doig also argued that abuse, corruption and financial scandals within churches showed there was nothing inherently ‘charitable’ about religion or being religious.

She noted that Australians were increasingly “voting with their feet” and identifying as not religious, making it questionable why the federal government should continue support for merely ‘advancing religion’ contrary to the public will.

“If the advancement of religion were a goal worthy of taxpayer subsidisation, the dramatic trend away from religious affiliation would suggest the effort has failed,” she said.

The RSA’s submission pointed to the example of the Australian Christian Lobby (ACL) as an organisation given charity status for the purpose of ‘advancing religion’ while having primarily political aims.

Dr Doig noted that at the 2021 federal election the ACL targeted its activities against certain sitting members of the Liberal Party who had voted against proposed religious discrimination laws.

The submission also noted key findings from social researcher Neil Francis’ fourth volume of the Religiosity in Australia series, focusing on religion and charity. In the new report, Francis shows that, while it is true that religious people donate more and volunteer more than the general population, this charitable activity “largely occurs in respect of their own religious congregation rather than delivery of support services to others”.

Join us at our next RSA Webinar on Wednesday 28 June, when Dr Philip Saj will present on ‘Basic Religious Charities: The case for more transparency’. To attend, register here.

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