Changes to not-for-profit laws may silence activists and advocacy groups

In February 2021, the Treasury released an Exposure Draft of a law that would change how not-for-profit organisations are regulated in Australia. These changes, which have so far escaped widespread attention, could significantly stifle activist organisations and advocacy groups more broadly. 

As a brief overview, all Australian not-for-profits (except for “basic religious charities”) must comply with certain minimum standards of behaviour in order to remain a “registered entity” and receive tax concessions. These Governance Standards have been administered and enforced by the Australian Charities and Not-for-profits Commission (ACNC) since late 2012.

Governance Standard 3 empowers the ACNC to investigate registered entities which act unlawfully. At present, the ACNC can only look into serious matters – either indictable criminal offences, or offences which carry civil penalties of $12,600 or more.But under the Draft, the ACNC would be able to investigate – and potentially deregister or revoke tax concessions from – entities who have been involved in certain lower-level summary offences. According to the Explanatory Statement to the Draft, this would include “unlawfully gathering or remaining on land or in a building”, which would affect organisations which undertake direct action or physical acts of civil disobedience.

This concern isn’t unfounded. In a media release last year, then-Assistant Minister for Charities Zed Seselja clearly expressed the government’s intent to target activists, stating: “Late night break-ins. Illegal blockades. Damage to property and theft of stock. These are the types of unlawful behaviours promoted and engaged in by activist organisations masquerading as charities that will no longer be tolerated under strengthened rules to be implemented by the Morrison Government.”

Michael Sukkar MP, the current Minister in charge of charities, did not respond to Honi’s request to specify instances of activist organisations engaging in the behaviour Seselja described, or why deregistration or removing tax concessions, which several not-for-profit organisations heavily rely on, would be a proportionate response. 

As such, without further proof, the government’s insinuation that activist organisations regularly engage in violent illegal behaviour – including “malicious damage, vandalism or theft of personal property” and “common assault or threatening violence against an individual”, as mentioned in the Explanatory Statement – seems misleading and unfounded.

Even regarding peaceful, lawful protests – which are where the majority of activists and members of the public get involved – recent decisions to reject COVID-safe plans for protests at the last minute and violently shut down student protests pursuant to public health orders have shown how a “lawful” protest can quickly tip towards an “unlawful” gathering, as deemed by police. It’s not hard to see how not-for-profit organisations that organise protests and public demonstrations could decide to reduce or limit their organising activity for fear of deregistration, with worrying implications for democracy and freedom of assembly. 

Not-for-profit organisations, including the USyd SRC, have criticised the proposal. “A large part of our organisational mandate includes advocacy, which by extension involves protest,” says SRC President Swapnik Sanagavarapu. “It is clear that the Government finds dissent intolerable and seeks to prevent the exercise of the legitimate right to protest and political speech.” Advocacy group GetUp’s National Director Paul Oosting stated to Honi that “[t]he government is trying to quell the rising tide of community activism … [through] a politically motivated attack on charities designed to undermine their right to peaceful protest”.

***

While the work of some activists may be hindered, several activist networks are not registered with the ACNC, and so would not be subject to this change. More worryingly, on a sector-wide level, a blunt application of the new Governance Standard 3 could cover any charity or not-for-profit that engages in advocacy, no matter how much or how little.

This is because it requires registered entities to take “reasonable steps” to ensure that their “resources” are not used to “promote and support” unlawful activities. The wide scope of “resources” – including an organisation’s funds, their responsible entities and employees, and their websites, social media accounts and other publications – severely limits their ability to advocate on sensitive or controversial political matters. And the lack of guidance around what constitutes “reasonable steps” and “promotion and support” has left not-for-profits uncertain about whether they are complying with the legislation, with Sanagavarapu concerned about the prospect of liability if someone attending an SRC-organised protest commits an offence, which the SRC cannot control.

If this Standard was in force this time last year, it could mean that organisations that encouraged their Facebook followers or members on a mailing list to attend last June’s Black Lives Matter protests, at the time they were outlawed, could face deregistration. It could mean that community legal centres that provided legal assistance to protestors and observed breaches of power by police, such as the Aboriginal Legal Service, could be viewed as having “supported” the protests. It could also mean that not-for-profits which donate to or share funds with registered organisations that organise protests could be caught up in this law. 

“The infractions which could spark deregistration are so minor in nature that they could easily be weaponised against charities who raise genuine concerns about government policies in order to silence dissent,” says Greenpeace Australia Pacific General Counsel Katrina Bullock. And considering Seselja’s anti-activist rhetoric, it would not be surprising if any of those outcomes occurred; the Explanatory Statement indicated that deregistration could be pursued “in all cases”.

The unclear wording of this Draft leaves advocacy groups and not-for-profits in the lurch. It does not adequately clarify their compliance obligations, which well-constructed Governance Standards should aim to do. Despite the Charities Act 2013 stating that “promoting or opposing a change” to any Australian law or policy on social issues is within the charitable purpose of a charity, the Draft may instead increase uncertainty and discourage charities from advocacy, with Greenpeace’s Bullock signaling that it would “have a chilling effect on freedom of speech in Australia”. “The SRC is clearly a charitable organisation insofar as it provides free resources and services to students, but we have never hidden the fact that we advocate for political and legislative changes to benefit our members,” adds Sanagavarapu.

The proposed Standard is of such concern that corporate law firm Gilbert + Tobin has warned that instead of “upholding public trust in our charities”, as Seselja asserted, it would “erode advocacy and activism” led by not-for-profits, which “threatens the effectiveness and impact of the charity sector as a whole”. 

Not-for-profit organisations lead some of the most critical social movements in this country. As Seselja accepted, the vast majority of charities are “doing the right thing”, and they should be treated as such. Keeping their advocacy function intact, and ensuring they are not exposed to unnecessary liability or threats of deregistration, is vital for their core purpose of social justice and charity.

The Government is accepting responses to the Draft until 14 March 2021.