Australia: Updated guidance from the ACNC in relation to Health Promotion Charities: what you need to know

On 30 June 2023, the Australian Charities and Not-for-profits Commission released a revised Commissioner's Interpretation Statement: Health Promotion Charities. The revised Commissioner's Interpretation Statement is the ACNC's updated guidance on how it will determine whether an organisation is eligible to be registered as a charity with the 'Health Promotion Charity' subtype. This article details what you need to know about the updated guidance from the ACNC in relation to Health Promotion Charities.

The revised Commissioner's Interpretation Statement updates the ACNC's guidance concerning health promotion charities in three ways.

Firstly, the ACNC's guidance now reflects the current case law concerning health promotion charities. The decision of the Administrative Appeals Tribunal inWaubra Foundation v Commissioner of the Australian Charities and Not-for-profits Commission[2017] AATA 2424, which was released on 4 December 2017, provides guidance on determining whether an organisation is a health promotion charity. This updated guidance reflects the views inWaubraon whether an organisation:

• promotestheprevention or controlofdiseases in human beings; and
• has aprincipal activityof promoting the prevention or control of diseases in human beings.

Secondly, the ACNC's guidance confirms that it will group together similar activities in determining whether an organisation has a principal activity of promoting the prevention or control of diseases in human beings (a threshold requirement for determining whether an organisation is a health promotion charity).

This is an important update to the ACNC's guidance, because where an organisation that wishes to be a health promotion charity pursues multiple activities, it must ensure that the activity which occupies a greater share of the organisation's time and money than all other activities is the promotion of the prevention or control of diseases in human beings. This activity can, but does not need to, occupy a majority of the organisation's time or money – a mere plurality is sufficient (i.e., the organisation does not need to be spending 50% of its time and money on this activity).

Lastly,the ACNC's updated guidance also accepts that administrative activities are a required component for organisations. The ACNC will not take administrative activities into account when working out whether an organisation's principal activity is the promotion of prevention or control of diseases in human beings. This is because the ACNC considers administrative functions merely ancillary or incidental to an organisation's principal activity.

The below example from the new Commissioner's Interpretation Statement shows that an organisation whose activities were divided in accordance with the below table would have a principal activity of promoting the prevention or control of diseases in human beings, as:

• the 15% of time spent by the organisation on administration would be disregarded; and
• whilst undertaking research into how to diagnose heart disease in domestic animals is the organisation's largest single activity (at 25%), the organisation's health promotion activities together make up 60% of the organisation's activities (both a plurality and a majority).

Health promotion charities can access additional benefits beyond those that other charities are able to access. Unlike other charities, who can access a Fringe Benefits Tax rebate, health promotion charities are able to access a Fringe Benefits Tax exemption (up to a cap of $30,000). In addition, registration as a health promotion charity with the ACNC gives an organisation the ability to apply for and receive Deductible Gift Recipient status (allowing it to provide tax-deductible donations to donors).

We will be monitoring how the ACNC implements its new Commissioner's Interpretation Statement with interest.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.