A Guide for Australian Charities on Political Advocacy Campaigning & Electoral Law

Introduction

Australian charities often engage in advocacy and campaigning to advance their charitable missions. These campaigning activities are a legitimate way to contribute to public debate, particularly during a federal election. However, charities must operate within a complex framework of both charity and electoral laws to avoid serious legal consequences.

This guide provides essential information for Australian charities on conducting their advocacy and campaigning activities lawfully. It clarifies the critical line between permissible charity advocacy and a disqualifying political purpose, helping organisations protect their charitable status while effectively pursuing their objectives.

Advancing Public Debate: a Disqualifying Political Purpose

Defining Advocacy & Campaigning for Your Charity

To understand the rules of charity advocacy, it is important to distinguish between a charity’s ‘purpose’ and its ‘activities’:

• A charitable purpose is the overarching mission a charity is established to achieve, such as advancing social welfare, and a clear understanding charitable purpose is crucial for compliance under the Charities Act 2013 (Cth).
• In contrast, charitable activities are the specific actions undertaken to support that purpose. For example, a charity with the purpose of advancing social welfare might hold a cake sale; the sale is an activity to raise funds for its mission.

Furthermore, advocacy and campaigning are types of activities that can help a charity further its purpose. The Australian Charities and Not-for-profits Commission (ACNC) defines these terms with specific meanings for charities:

• Advocacy refers to activities aimed at securing or opposing changes to laws, policies, or practices. This can involve participating in public policy development or raising awareness about specific issues.
• Campaigning involves activities designed to educate the public, change public behaviour, or mobilise support for a cause.

Understanding Disqualifying Political Purposes

For an organisation to be registered and operate as a charity, it must not have a disqualifying political purpose. Engaging in advocacy and campaigning is permissible, but these activities must not cross the line into promoting a disqualifying purpose.

Consequently, if a charity is found to have a disqualifying purpose, it risks regulatory action or even deregistration by the ACNC.

There are three specific types of disqualifying purposes that a charity must avoid:

• Promoting or opposing a political party or candidate: A charity cannot have a purpose of supporting or opposing a political party or a candidate for political office. This includes activities like distributing how-to-vote cards or donating money to a political campaign, which falls under the complex regulations governing charity fundraising and donations.
• Engaging in or promoting unlawful activities: A charity cannot have a purpose that involves promoting or engaging in illegal activities. While a single unlawful act by an associated individual may not demonstrate a disqualifying purpose, a consistent pattern of unlawful behaviour likely would.
• Engaging in or promoting activities contrary to public policy: This includes promoting activities that undermine the rule of law, the constitutional system of government, or public safety. It is important to note that advocating against a specific government policy is not the same as acting contrary to public policy.

How the ACNC Can Challenge Charity’s Status

The ACNC’s Role & Powers of Investigation

The ACNC is responsible for handling concerns raised by the public regarding a charity’s political activities, making it vital for charities to have a strategy for responding to an ACNC investigation. Furthermore, the ACNC has an established process to receive and review these concerns to determine if a charity’s advocacy and campaigning activities cross into having a disqualifying political purpose—a key aspect of ACNC compliance for charities.

When the ACNC identifies a charity at risk of engaging in advocacy for or against a political party or candidate, they generally prefer a collaborative approach. Rather than immediately escalating the issue, their initial steps often include:

• Providing guidance to help the charity understand the distinction between permissible advocacy that aligns with its charitable purpose and activities that could lead to compliance issues.
• Seeking to resolve matters through discussion and rectification before escalating to formal enforcement action.

Consequences of a Disqualifying Political Purpose Finding

If the ACNC determines that a charity’s campaigning activities demonstrate a disqualifying political purpose, the consequences can be significant. Ultimately, such a finding means the organisation is no longer operating exclusively for charitable purposes as required by law.

As a result, the ACNC has the authority to take various forms of regulatory action against a charity found to have a disqualifying political purpose. In serious cases, this enforcement can lead to severe impacts, such as:

• Revoking the organisation’s registration as a charity.
• Triggering an extreme outcome like deregistration, which jeopardises a charity’s status and its ability to operate.

Breaching Commonwealth & NSW Electoral Laws

The Australian Electoral Commission Dispute: Breaching the Commonwealth Electoral Act 1918 (Cth)

Under the Commonwealth Electoral Act 1918 (Cth), a charity’s campaigning can create legal obligations once it incurs ‘electoral expenditure’—spending whose dominant purpose is to communicate material that seeks to influence federal voting behaviour.

When a charity’s electoral expenditure for a financial year rises above the disclosure threshold, it becomes a third party. At that point, it must:

• Lodge an annual return with the Australian Electoral Commission (AEC).
• Comply with restrictions on foreign-sourced donations used for electoral expenditure.

A charity will be deemed a significant third party if its spending passes certain benchmarks, including electoral expenditure of more than $250,000 in the current or any of the previous three financial years. Key criteria include:

• Electoral expenditure exceeding $250,000 in the relevant period.
• Satisfying any other prescribed conditions set by the Act.

Once significant-third-party status is triggered, additional duties apply. In particular, the organisation must:

• Register with the AEC as a significant third party.
• Observe tighter foreign-donation restrictions linked to that registration.

The NSW Electoral Commission Dispute: Breaching the Electoral Funding Act 2018 (NSW)

Under the Electoral Funding Act 2018 (NSW), a charity becomes a third-party campaigner if it spends more than $2,000 in electoral expenditure for a State or local election during the capped period.

Once this $2,000 threshold is crossed, the charity faces several mandatory steps:

• Register with the NSW Electoral Commission (NSWEC) before making payments over the cap.
• Appoint an official agent to oversee campaign finances.
• Meet the NSWEC’s disclosure and reporting obligations—failure to do so constitutes a breach of NSW electoral funding laws.

A Defence Guide for Advocacy Charities

Defending Your Activities as Furthering a Charitable Purpose

A charity can demonstrate that its advocacy and campaigning activities are legitimate by ensuring they are conducted to further its stated charitable purpose. Furthermore, the law permits a charity to have a purpose of advancing public debate, provided this work supports another of its charitable objectives.

To defend its campaigning activities, a charity can engage in several permissible forms of advocacy. These activities are recognised as legitimate methods for furthering a charitable mission and include:

• Making submissions or providing evidence to public inquiries regarding existing or proposed laws and government policies.
• Generating public discussion and seeking explanations of current or proposed government practices.
• Publishing research and analysis on laws and policies relevant to the charity’s purpose.
• Distributing information that compares or critiques the policies of different political parties as they relate to the charity’s objectives.
• Directly promoting the charity’s purpose or the interests of its beneficiaries to elected officials.
• Hosting or participating in public debates on matters of law or policy.

When assessing or comparing the policies of political parties, a charity is less likely to be found to have a disqualifying purpose if its approach is based on reasoned policy arguments and research. Consequently, a clear and documented methodology that connects the advocacy back to the charity’s purpose is a key element in defending the legitimacy of these activities.

Maintaining Independence & Managing Public Perception

Charities must carefully manage their independence and public perception, particularly during a federal election. Even when a charity’s policy position aligns with that of a political party, it is crucial that its campaigning activities do not amount to a purpose of promoting or opposing that party or its candidates.

To safeguard the organisation’s reputation, the governing body and responsible persons (such as board members and directors) should remain vigilant by focusing on the following:

• Considering the potential impact of advocacy and campaigning on the organisation’s overall standing.
• Recognising that public perception is important, especially given the increased risk during an election period that the public may associate a charity’s advocacy with a particular political party.
• Being mindful of online activities and social media to prevent harming the charity’s reputation for independence.
• Ensuring that all communications are seen as strictly non-partisan and focused on advancing the charity’s purpose rather than supporting a political entity.

Conclusion

Australian charities can engage in political advocacy and campaigning, provided these activities further their charitable purpose and do not cross into having a disqualifying political purpose. It is also crucial for them to comply with both Commonwealth and NSW electoral laws to avoid significant penalties and protect their registered status.

Given the complexities of these legal frameworks, ensuring your charity’s advocacy remains compliant is essential. For specialised guidance on not-for-profit and charity law in NSW, contact our experienced not-for-profit lawyers at LawBridge today to ensure your campaigning activities effectively support your mission without risking your organisation’s future.

Frequently Asked Questions