Religious charities found to have engaged in illegal activity under any new state laws targeting coercive control and harmful activity in cults and high-demand groups could face regulatory action and have their charitable status revoked, the nation’s charities regulator has confirmed.
In a letter to the Rationalist Society of Australia, the Australian Charities and Not-for-profits Commission (ACNC) said it “may review whether a charity meets the requirements for registration” if a Basic Religious Charity (BRC) breached laws related to addressing coercive control.
However, the ACNC confirmed that it would not be able to take action under its Governance Standard 3, which exempts BRCs – organisations with charity status for ‘advancing religion’ – from having to comply with Australian laws.
The RSA wrote to the ACNC in December seeking clarification following ACNC Commissioner Sue Woodward’s November appearance at the Victorian parliamentary inquiry examining cults and fringe organised groups.
The Victorian Legislative Assembly’s Legal and Social Issues Committee inquiry is seeking to “understand whether current laws are strong enough to deal with groups that use manipulation or control in ways that can seriously hurt people”.
In response to the RSA, a spokesperson said the ACNC could take regulatory action if it determined, for example, that a charity has a ‘disqualifying purpose’ which “involves engaging in or promoting unlawful activities”. Similarly, the ACNC could determine that a charity “may not be for the public benefit” if it had a purpose that “causes significant harm or detriment”.
In such cases, the ACNC said, a charity may no longer meet the applicable legal definition of a charity.
“Organisations that do not meet the applicable legal definition of a charity do not meet one of the requirements for registration with the ACNC,” said the spokesperson.
“In such cases, the ACNC could consider actions such as revoking registration. While options are more limited for Basic Religious Charities, the exemption does not prevent all regulatory action. It’s also important to note that charities can operate without ACNC registration, but they would lose access to Commonwealth tax concessions.”
The ACNC said the exemption to Governance Standard 3 would only mean the ACNC could not enforce compliance under that standard.
“Basic Religious Charities, while exempt from Governance Standard 3 for ACNC purposes, must still comply with all applicable Australian laws, including any coercive control legislation introduced in Victoria,” the spokesperson said.
“… it does not remove their legal obligations. Breaches of state or federal law can still result in enforcement by the relevant authorities.”
In a written submission to the Victorian committee inquiry, the ACNC said the reduced reporting obligations and the inapplicability of the Governance Standards relating to BRCs “significantly impacts the manner in which the ACNC can apply our regulatory approach and enforcement powers when concerns are raised, or issues arise”.
Its submission also said that the “differences between the obligations” of BRCs and other charities “could impact … the public’s trust and confidence” in the charity sector.
In appearing before the inquiry, Ms Woodward confirmed that the ACNC had, over the 13 years of the regulator’s history, received “concerns” related to allegations about the treatment of people in religious charities, including concerns relating to coercive control in high-control organisations.
In recent years, the ACNC has on multiple occasions now raised concerns about the “reduced transparency” of BRCs and the impact of this on public trust and confidence in the charity sector, and on the ACNC’s compliance work.
The Albanese government is yet to respond to a recommendation, made by the Productivity Commission in May 2024, for the removal of the BRC category from Australia’s charities laws in order to “enhance regulatory consistency and public transparency”.
The RSA has directly urged the responsible minister, Andrew Leigh, to support the Productivity Commission’s recommendation. In September 2024, the RSA joined with a number of pro-secular organisations in writing to Dr Leigh on the matter.
We are actively campaigning for coercive control laws to be extended to cover cults and high-demand groups. Follow our campaign here.
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Si Gladman is Executive Director of the Rationalist Society of Australia. He also hosts ‘The Secular Agenda’ podcast.