What, exactly, is a charity?

Charity (640x481)by Trent Wakerley

Whether by email, telephone or being approached on the street, we all are asked to donate to various causes from time to time.

If an entity is a Charity, the entity receives certain tax concessions and other benefits.

The meaning of Charity and Charitable Purpose has evolved under common law and determining whether an entity was a Charity or not required a detailed review of numerous cases handed down over the past few hundred years.

To provide clarity and certainty regarding the definition of Charity and Charitable Purpose, the Government released a paper in 2011 seeking submissions about a definition of Charity to be contained in legislation applicable across all Commonwealth Laws.

About 200 submissions were received and after considering the submissions the Charities Bill 2013 has been drafted to include a definition of Charity and Charitable Purpose more suited to modern Australia.

It is hoped that the definition will assist in reducing the need for costly litigation which is sometimes required for an entity to establish that it is a  Charity.

Public consultation regarding the draft Bill ceases on 3 May 2013 with a view to the Bill becoming law with effect from 1 January 2014.

If you’d like to make a submission or just want to find out a bit more information, head to the Treasury Website for details.