The ACNC has launched a consultation period for its draft Commissioner’s Interpretation Statement on health promotion charities (HPCs). Recognising that confusion exists, the Commissioner wishes to issue an Interpretation Statement (Statement) relating specifically to HPCs.
The concept of an ‘HPC’ recognises that there is a subset of charities devoted to the prevention or control of disease that need to be categorised separately from public benevolent institutions (PBIs).
In its draft form, the Statement offers explanations on the relevant requirements to achieve registration as an HPC. This alert provides a brief summary of each element. For the full exposure draft, visit the ACNC website.
An HPC is defined as ‘an institution whose principal activity is to promote the prevention or the control of diseases in human beings’. While the ACNC will generally give the words of the definition their ordinary meaning, there has been no judicial decision in relation to the definition, so it remains fluid and the ACNC is open to accepting changes. This might arise for example, when new forms of diseases are required to be recognised.
To be an HPC, an organisation must meet the eligibility criteria of a ‘charity’ under the Australian Not-for-Profits Commission Act 2012. The criteria include being a not-for-profit entity, complying with relevant standards, having an ABN and not being associated with criminal activities.
The ACNC does not consider that the purpose of the entity needs to be the advancement of health in order to qualify as an HPC. By way of example, a charity that is for the advancement of education may focus its main educational activity on promoting safe sex in order to prevent sexually transmitted disease but still qualify as an HPC.
In addition to being a charity, an HPC must also meet the definition of an ‘institution’. This requires the entity to be incorporated as a legal structure and to carry out a charitable purpose. Both of these are mandatory. The ACNC has advised that the structure, size, permanence, recognition and activities will be considered among other factors in determining whether an entity is an institution.
The defining factor of HPCs is the ‘activity’ they carry on. The principal activity is the predominant activity conducted, meaning that it is the activity conducted more than any other activity. However, this does not mean that it must take the majority of the charity’s time or resources.
Importantly, the principal activity must be conducted in order to promote the prevention or control of disease.
Diseases in human beings
To be an HPC, the disease targeted must affect human beings. ‘Disease’ is a broad term covering both mental and physical illness, as long as the illness is an identified disease rather than a general health condition or symptom. The ACNC has indicated that promoting a healthy lifestyle would not be sufficient, without identifying the diseases that are being prevented or controlled through this promotion.
The ACNC will be guided by the recognised diseases taken from the Australian Institute of Health and Welfare, the World Health Organisation and other reputable international agencies such as the U.S. Center for Disease Control and Prevention.
Promote the prevention or control
The principal activity must be to ‘promote the prevention or control’ of diseases. Promote is taken to include the growth, development, progress of, encouragement of and fostering of the prevention or control of disease. A charity is not necessarily required to demonstrate its success in preventing or controlling a disease just that its activities go to this effect. This allows for charities to be defined as an HPC if they partake in research of a particular disease.
Fundraising without the identification of a specific charity or disease will not make the organisation eligible to be registered as an HPC. If it does fundraise for particular disease, for example, breast cancer, and all other criteria are satisfied in the course of the fundraising activities, the organisation is, depending on the degree and purpose of the fundraising, likely be considered an HPC.
Examples of HPCs include:
- research and education into treatment and care for people suffering from brain cancer;
- provision of mental health nurses and paediatric staff to rural communities;
- cancer awareness programs conducted in rural areas;
- providing sexual health and STI awareness classes for young people; and
- providing behavioural therapy for serving and retired military personnel suffering from post-traumatic stress disorder and military-induced illness.
The ACNC is inviting comments on the draft Statement by 15 February 2015. The final statement will be binding on ACNC officers, charities and their advisers.