There has been a campaign for some time against charities by the Commissioner in relation to their tax exempt status and in particular there has been concern at a political level particularly under the former Government as to whether the lobbying undertaken by charities and as to whether this affects their charitable nature.

The Commissioner has now succeeded in arguing that the charitable exempt status may be affected by the political activities undertaken by the organisation. The Full Bench of the Federal Court has upheld the Commissioner’s determination to revoke its endorsement as a tax exempt charity. The Court held that the main purpose of the organisation was a political purpose rather than a charitable purpose. The activities of the organisation described in its Constitution involved “campaigning” and its primary goal was to influence government. Even though the organisation was not involved in any lobbying of Government, the natural and probable consequence of the organisation’s activities was an effect on public opinion and then on government opinion. The Court rejected the Tribunal’s decision that the main purpose of the organisation was not political.

Care therefore needs to be taken in relation to the activities of a charitable organisation to ensure that its main purpose remains charitable at all times and that any political activity such as campaigning for change is not its main purpose.