Incidental or Ancillary Purpose of Registered Charities

The Australian Charities and Not-for-profits Commission (ACNC) recently released a De-identified Registration Decision Summary, illustrating its approach to assessing activities which are incidental or ancillary to an organisation’s charitable purposes in the context of charity registration. The decision examines the extent to which incidental or ancillary activities that are not inherently charitable may still be justified as advancing a charity’s charitable purposes.

Summary of the Decision

The ACNC reviewed a charity registration application from an organisation (referred to as the Applicant) primarily focused on operating a religious congregation and undertaking ministry in the community. While most of its activities, such as running church services and providing spiritual care, were clearly aligned with its charitable purpose of advancing religion, the ACNC raised queries regarding a weekly morning tea and craft activity (Ancillary Activity).

The core issue was whether the Ancillary Activity’s recreational nature risked characterisation as an independent, non-charitable purpose.  If the Ancillary Activity could not be linked to the charitable purpose of advancing religion, it might be considered a separate, non-charitable purpose, potentially undermining the organisation’s overall charitable status. 

In this case the Applicant identified that the Ancillary Activity served as a way for the Applicant to connect with the community to share the Applicant’s beliefs, thereby reinforcing its charitable purpose of advancing religion. 

Upon review, the ACNC concluded that although the Ancillary Activity had social elements, it was ultimately ‘incidental or ancillary’ to the charitable purpose of advancing religion. 

Key Takeaways 

• The decision provides further guidance on the ACNC’s approach to assessing whether activities that appear social or recreational can legitimately support a charity’s charitable purpose.
• The ACNC expects charities to demonstrate that incidental or ancillary activities are clearly aligned with, and are subordinate to, their charitable purpose as contemplated under section 5 of the Charities Act 2013 (Cth) (definition of charity).

 Assistance from Jackson McDonald

For specific legal advice, please contact Elizabeth Tylich, Emma Chinnery or David Murphy.

This article was written by Ava Breton, Law Graduate Jackson McDonald.