Should any of the organizations listed as religious-based charities provide reports to the ACNC? Phil Saj unpacks the argument they should.
The release of the Charities Report 2020 again raises interesting questions about the charity category – Basic Religious Charity (BRC) – and whether or not some of the organizations in this category might actually provide reports to the ACNC.
At issue is whether the application of the Australian Charities and Not-for-Profits Commission Act 2012 (the Act) in relation to the BRCs not only complies with the letter of the Act, but the purported intention of the legislators ; since small unincorporated religious communities with limited resources and not engaged in significant economic activities, should not be unduly burdened with reporting requirements.
The BRC category is clearly defined in section 205.35 of the Act. Charities that meet the six criteria set out in this article receive relief that is not available to other charities. Specifically, BRCs are not required to report financial information; are not required to comply with the governance standards of the Act; and are not subject to the Act’s powers of dismissal and suspension that apply to breaches of the Act or corporate governance standards. BRCs are required to report to the ACNC only basic descriptive information about their activities in an Annual Information Statement (AIS).
However, a considerable number of charities, which have been accepted by the charity regulator as BRCs, are engaged in significant economic activity and/or major public policy debates. They also have resources at their disposal that would enable them to easily meet the reporting requirements imposed under the Act on charities of comparable size that are not classified as BRCs.
Three examples, which were selected using a purposive sampling methodology, illustrate this anomaly.
1: The Anglican Investment and Development Fund
The Anglican Investment and Development Fund (AIDF) is one of several BRCs that provide financial services similar to those of credit unions or banks, but with the explicit purpose of funding church-related projects. On its “about us” page, the AIDF states that it “receives funds from investors and makes loans to parishes and other diocesan agencies (e.g. schools) for building or building projects. ‘other capital works’ (www.aidf.com.au). In addition, we are told that “the AIDF provides no-fee accounts, including access (current accounts) and term investments paying consistently very competitive interest rates”; and that it “offers secure ‘online transaction services’ functionality, including BPay, MYOB, Banklink (accounting), Cemtex (professional payrolls) and third-party payment functionality” (www.aidf.com.au).
Although the AIDF only provides the ACNC with an AIS, in which it states its activities and results as “benefiting the whole community of the Anglican Diocese of Canberra and Goulburn by providing income from the annual surplus”, it provides full audited financial statements on its website, presumably because of the business imperative to attract lenders. In 2020, the AIDF reported revenues of nearly $4 million, operating income of over $1.7 million, total assets of over $10 million, and investor funds of over $90 million.
2: The Australian Catholic Bishops’ Conference
The Australian Catholic Bishops’ Conference is the vehicle through which Australian Catholic bishops address issues of national importance, including education, family life and social justice. The conference meets twice a year and has a permanent secretariat which carries out the decisions of the conference and implements its policies. It is a modern and sophisticated organization with a workforce of thirty-nine (FTE) and dedicated finance and information technology functions. In 2020, the conference published (for the first time) an annual report containing a full summary of its activities and a single line revealing that its revenue for the previous twelve months was over $11 million. This annual report, the conference acknowledged, was produced in response to recommendations from the Royal Commission on Institutional Responses to Child Sexual Abuse regarding transparency and accountability.
3: Australian Christian Churches
Australian Christian Churches (ACC) is the national association of Pentecostal churches in Australia. It describes its activities and results in its AIS 2020 as “a movement of Pentecostal churches in voluntary cooperation…for the purpose of supporting each other and spreading the Gospel in Australia and around the world”. On its website, the ACC states that it undertakes this work through eight expanded ministries. One of these ministries is ACS Financial, a company that provides financial services, such as insurance, loans, investments and risk management to churches, schools and ministries (www.acsfinancial.com.au/about-us/). ACS Financial Services is owned by ACC Directorate Limited, which in turn is owned by ACC. In 2020, ACCD Directorate Ltd reported total assets of over $34 million and liabilities for debentures issued of over $33 million. Another ACC ministry is Alpahcrucis University College, which offers courses in business, theology, social sciences, and music. Alphacrucis operates through a limited liability company wholly owned by ACC. In 2020, Alphacrucis reported revenues of over $25 million and net assets of over $37 million.
A charity may be classified as a BRC but may undertake significant economic activities and/or engage broadly with the Australian community, not only on religious matters, but also on educational and social matters. It can have significant resources. Obviously, such an organization would not be required to report to ACNC in the same way as other charities of comparable size.
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