With the Federal election due to take place this year, charities should be aware that there have been recent changes to the law (from December 2021) which may affect their advocacy and campaigning.
Charities have a broad ability to engage in advocacy and campaigning. They can promote or oppose a change to any matter or law, policy or practice provided that these activities advance their charitable purpose, and do not constitute a “disqualifying purpose”.
A “disqualifying purpose” will include:
- Engaging in or promoting activities that are unlawful;
- Engaging in, or promoting, activities that are contrary to public policy, or
- Promoting or opposing a political party or candidate for political office.
A charity is able to even go so far as to assess, compare and rank the policies of the various political parties and their candidates provided that this promotes the charities’ purposes and does not have a purpose of “promoting or opposing a political party”.
For example, a health promotion charity may compare the policies held by political parties around funding for treatment of rare diseases, but must stop short of recommending that people vote for or against any particular party or candidate.
A charity may find its charity registration in jeopardy if its advocacy work strays beyond the advancement of its charitable purposes (or what is ancillary or incidental to its charitable purpose).
While there is a charitable subtype of “advancing public debate”, a charity does not need to be registered under this subtype to engage in advocacy work.
Charities which incur electoral expenditure at or above the disclosure threshold are likely to be categorised as ‘third parties under the Commonwealth Electoral Act 1918 (the Act) and may be required to register and report to the Australian Electoral Commission (AEC).
Electoral expenditure is, broadly, expenditure which is incurred to create or communicate material which itself has a dominant purpose of influencing the way electors vote in a federal election of a member of the House of Representatives or of Senators for a State or Territory…[i]”
The disclosure threshold amount that applies from 1 July 2021 to 30 June 2022 is expenditure at or above $14,500.00.
Charities must disclose domestic donations to the Australian Electoral Commission for the amount or value equal to or above the disclosure threshold, which are then used:
- to incur electoral expenditure;
- to create or communicate electoral matter; or
- to reimburse the charity for one of these activities.
Third Party Obligations
Charities which meet the definition of “third parties” under the Act (but incur expenditure below the amount which would require registration as a “significant third party[ii]”) must:
- Provide an annual return to the AEC by 17 November each year; and
- Comply with foreign donations restrictions.
Third parties are not required to register with the AEC. They will, however be included on a “Transparency Register” if they lodge a financial disclosure return for the current or any of three previous financial years. They will remain on the Transparency Register for three years following their last financial disclosure return.
Foreign Donation Restrictions – Third Parties
If a charity is a “third party” they are able to receive foreign donations, but are restricted from using those donations to incur electoral expenditure or create or communicate electoral matter.
Please note that if a charity incurs electoral expenditure below the disclosure threshold there are no restrictions on receiving or using foreign donations.
If your charity would like advice in relation to its advocacy activities, or its obligations under the Act in advance of this years’ Federal election, please contact us.
[i] Section 4AA Commonwealth Electoral Act 1918
[ii] Your charity will be categorised as a significant third party where:
- electoral expenditure is $250,000.00 or more during that financial year or any one of the previous three financial years; or
- electoral expenditure is at least equal to the disclosure threshold during that financial year, and electoral expenditure during the previous financial year was at least one-third of the revenue of the person or entity for that year; or
- during that financial year the charity operates for the dominant purpose of fundraising amounts, the aggregate of which is at least equal to the disclosure threshold, and that are for the purpose of incurring electoral expenditure (or to be gifted to another person or entity for that purpose).
Section 287F Commonwealth Electoral Act 1918