"...in Australia there is no general doctrine which
excludes from charitable purposes 'political
A case handed down by the High Court of Australia yesterday held
that an organisation whose objects are to promote greater
efficiency and effectiveness of foreign aid directed to the relief
of poverty, by campaigning and generating public debate, may be
considered a charitable institution for the purpose of tax
The High Court's decision in Aid/Watch Incorporated
v Commissioner of Taxation  HCA 42 (1 December 2010) can
be accessed here.
The effect of the decision beyond promoting public debate is
that some organisations which do not fall within the charitable
purposes set out in the Australian Taxation Office
(ATO) Not for Profit Guidelines (NFP
Guidelines) may be considered charitable if they are able
to show some degree of contribution to the public
In October 2006 the Commissioner of Taxation
(Commissioner) revoked Aid Watch's
endorsements as a charitable institution on the basis that its
purposes were 'political' and not
Aid Watch is an organisation focused on promoting the
effectiveness of aid provided in foreign countries through
investment programs, projects and policies.
In 2008 the Administrative Appeals Tribunal
(AAT) set aside the decision of the Commissioner
and determined that Aid Watch's political campaigning seeking
to influence government policy in relation to foreign aid fell
within the activities for a charitable institution.
In 2009 the Commissioner appealed the decision to the Full Court
of the Federal Court. The Federal Court set aside the AAT
decision and held that the activities undertaken by Aid Watch was a
'political purpose' and could not be considered a
In March 2010, Aid Watch Incorporated was granted special leave
to appeal to the High Court to confirm that their objects and
activities fell within the meaning of a charitable institution.
The High Court held:
that the objects of Aid Watch to generate lawful means of
public debate concerning foreign aid policy directed at the relief
of poverty is in itself beneficial to the community; and;
there is no broad rule excluding political objects from
An organisation may be classed as charitable if its activities
the relief of poverty;
the advancement of education;
the advancement of religion; or
another purpose that is beneficial to the community.
The decision opens up the wider debate of a charitable
institution's activities in promoting its objects.
Organisations that 'lobby' may not necessarily be excluded
as charities but this depends on other factors, such as its
objectives in carrying out its activities.
The ATO NFP Guidelines lists among the institutions and funds
whose purposes are not charitable: political parties and lobbying
groups. Organisations seeking to apply to the ATO for charity
tax concessions should seek clarification as to whether their
activities are considered charitable under the High Court's
The ATO may publish an impact statement on the effect of the
High Court's decision.
Gadens Lawyers is able to assist organisations
seeking to apply for charity tax concessions and to review
activities to assess whether their objects and activities may be
 Aid/Watch Incorporated v Commissioner of Taxation
 HCA 42 (1 December 2010) at  per French CJ, Gummow,
Hayne, Crennan and Bell JJ
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