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Defining 'Charitable Purpose': What the Law Actually Means (and Why It Matters)

A practical guide for Australians with lived experience who want to start a charity

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Charity Law Guide

December 2024

If you're thinking about starting a charity based on your lived experience—whether that's mental health, disability, homelessness, addiction recovery, or any other challenge you've faced—understanding what the law means by "charitable purpose" is absolutely crucial. It's not just legal jargon; it's the foundation that determines whether your organisation can become a registered charity and access the benefits that come with it.

Let's break down what Australian law actually says, and more importantly, what it means for you.

What Is a Charitable Purpose Under Australian Law?

In Australia, charitable purposes are defined by the Charities Act 2013. This legislation sets out 12 specific categories of charitable purpose, and your organisation must fit into at least one of them to be recognised as a charity.

The 12 Charitable Purposes

  • Advancing health (including preventing or relieving sickness, disease or human suffering)
  • Advancing education
  • Advancing social or public welfare
  • Advancing religion
  • Advancing culture
  • Promoting reconciliation, mutual respect and tolerance between groups of individuals in Australia
  • Promoting or protecting human rights
  • Advancing the security or safety of Australia or the Australian public
  • Preventing or relieving the suffering of animals
  • Advancing the natural environment
  • Any other purpose beneficial to the general public that may reasonably be regarded as analogous to the above
  • Purposes ancillary or incidental to any of the above purposes

The Public Benefit Test: Your Purpose Must Help Others

Here's where it gets important for lived experience charities: your organisation must provide a public benefit. This means your activities must benefit the community or a significant section of it—not just you, your family, or a closed group of members.

Key Point: Your lived experience is valuable and can inform your charity's work, but the charity itself must exist to help others, not primarily to support yourself or a private group.

What Public Benefit Looks Like in Practice

✅ This Would Qualify:

You've experienced homelessness and want to start a charity that provides support services, advocacy, and education to people experiencing homelessness in your community. The charity is open to anyone who needs help, and your lived experience informs how you design and deliver services.

❌ This Wouldn't Qualify:

You want to start an organisation that provides financial support exclusively to you and a small group of friends who have experienced homelessness. The benefit is private rather than public.

Why "Charitable Purpose" Matters So Much

Understanding and correctly defining your charitable purpose isn't just about ticking boxes—it has real, practical implications:

1. Tax Concessions

Registered charities can access significant tax benefits, including income tax exemption and potentially Deductible Gift Recipient (DGR) status, which allows donors to claim tax deductions for their donations. This can make a huge difference to your fundraising capacity.

2. Grants and Funding

Many government grants, philanthropic trusts, and corporate giving programs are only available to registered charities. Without proper charitable status, you'll be locked out of significant funding opportunities.

3. Public Trust and Credibility

Being a registered charity signals to the public, donors, and partners that your organisation is legitimate, accountable, and operating for genuine public benefit. This trust is invaluable, especially when you're starting out.

4. Legal Protections

Charitable status provides certain legal protections and governance frameworks that can protect both your organisation and you personally as a founder.

Common Pitfalls for Lived Experience Charities

⚠️ Watch Out For These Issues:

Blurred Lines Between Personal and Public Benefit: It's natural to want to help yourself and others in similar situations, but the ACNC (Australian Charities and Not-for-profits Commission) will look closely at whether the primary purpose is public benefit or private benefit.

Solution: Clearly separate your personal recovery or support needs from the charity's work. Consider accessing support as a service user separately from your role as a founder or board member.

⚠️ Advocacy vs. Political Purposes:

While charities can engage in advocacy related to their charitable purpose, they cannot have a primary purpose of promoting a political party or candidate. This can be a grey area for social justice-focused lived experience charities.

Solution: Frame your advocacy work as advancing your charitable purpose (e.g., advancing health, promoting human rights) rather than as political campaigning. You can advocate for policy change, but it must be connected to your charitable purpose.

⚠️ Mutual Support Groups vs. Charities:

Peer support groups where members support each other are valuable, but they may not meet the public benefit test if they're primarily for mutual benefit of members.

Solution: If you want to run peer support as part of a charity, ensure it's open to the public (not just members), and consider offering additional services that clearly benefit the broader community, such as education, advocacy, or outreach programs.

How to Define Your Charitable Purpose Clearly

When you're drafting your organisation's governing documents (constitution or trust deed), you need to clearly articulate your charitable purpose. Here's how to do it effectively:

Step 1: Identify Which Charitable Purpose Category Fits

Look at the 12 categories above and identify which one(s) best describe what you want to achieve. Most lived experience charities will fit into:

  • Advancing health (mental health, addiction recovery, disability support)
  • Advancing social or public welfare (homelessness, poverty, social inclusion)
  • Promoting or protecting human rights (advocacy for marginalised groups)

Step 2: Write a Clear Purpose Statement

Your purpose statement should be specific enough to guide your work but broad enough to allow flexibility. Here's a template:

Example Purpose Statement:

"The purpose of [Organisation Name] is to advance the health and social welfare of people affected by [specific issue] by:

  • Providing support services and programs
  • Raising awareness and reducing stigma
  • Advocating for improved policies and services
  • Conducting and promoting research

All activities will be for the public benefit and open to anyone who needs support, regardless of their background."

Step 3: Demonstrate Public Benefit

In your governing documents and ACNC application, clearly explain:

  • Who will benefit from your charity (be specific but inclusive)
  • How your activities will benefit them
  • Why this benefit is needed in the community
  • How you'll ensure access is open and not restricted to a private group

Your Lived Experience Is Your Strength

Here's the good news: your lived experience is not a barrier to starting a charity—it's actually your greatest asset. The ACNC and the law recognise that people with lived experience often create the most effective, responsive, and innovative charities.

What matters is that you:

  • Structure your organisation to provide public benefit
  • Clearly define your charitable purpose within the legal framework
  • Maintain appropriate governance and accountability
  • Keep the focus on helping others, informed by your experience

Remember: Thousands of successful Australian charities were founded by people with lived experience. Your story, your insights, and your passion are exactly what the sector needs—you just need to channel them through the right legal structure.

Next Steps

If you're serious about starting a lived experience charity, here's what to do next:

  1. Research existing charities in your area of interest. Look at their purpose statements and learn from their structure.
  2. Seek legal advice from a lawyer experienced in charity law. Many community legal centres offer free or low-cost advice.
  3. Connect with your state's peak body for charities and not-for-profits. They often provide free resources and training.
  4. Draft your purpose statement and test it against the charitable purpose categories.
  5. Build a founding board with diverse skills and perspectives, including people with lived experience and people with governance expertise.
  6. Prepare your ACNC application carefully, ensuring your charitable purpose is crystal clear.

Your Lived Experience Matters

Starting a charity is challenging, but it's also one of the most rewarding ways to turn your lived experience into lasting change. Understanding charitable purpose is your first step toward building something that will help countless others.

You've got this.


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