Defining charities

Over the past year there has been considerable press given to decisions by the Charities Commission in New Zealand over decisions to deregister high profile charitable organisations, for example Greenpeace, and others that engage in political advocacy (not viewed as having a charitable benefit) or unable to demonstrate a link between their activities and public benefit. Today in Australia it was reported that Bicycle Victoria had been denied Deductible Gift Recipient (DRG). Bicycle Victoria remains a charity and therefore exempt from taxation however cannot receive tax deductible gifts from donors.

From a donors perspective it is silly that a donor can make a tax deductible gift to one charity but not to another. Why should one charity be favoured over another? The purpose of DRG is to enable and encourage donors to support charities rather than become a barrier to support.

On a deeper level it becomes increasingly important for charities to be clear in their charitable outcomes and how their activities directly contribute to those outcomes.

In the case of Bicycle Victoria, the mission statement on their website reads, Bicycle Victoria is an independent, not-for-profit organisation. We work with our supporters to get More People Cycling More Often and measurably grow the bike riding world.

Bicycle Victoria was denied DRG on the grounds it is not a health promotion charity. We know riding a bicycle is a healthy activity. It doesnt say that in the mission statement. The mission statement doesnt state how getting more people onto a bicycle will improve community wellbeing.

Let’s not take these things for granted, especially when dealing with beauracracy, the will play it down the line to avoid a future backlash. Maybe it is time for charities to become more specific in how they word their mission statements and how they explain their activities and the link between their activities, the mission statement and outcomes that justify them being considered a charitable organisation.


About John Coxon

Principal consultant for John Coxon & Associates, a management consultancy working with boards and management teams in healthcare, aged care and not for profit organisations to develop effective strategic planning processes and social enterprise business plans
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