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

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 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.

What Public Benefit Looks Like in Practice

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

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.

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.

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:

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

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.