An Indigenous charity is a not-for-profit organisation established for a charitable purpose often, but not always, to address the unique systemic disadvantages experienced by Aboriginal and Torres Strait Islander people arising from historical, societal and structural inequalities. These disadvantages are widely recognised by Australian society, government and the courts. As such, many organisations undertaking important work in this area can register as a charity with the Australian Charities and Not-For-Profit Commission (ACNC) and access a number of charity tax concessions such as income tax exemption. Further, as a result of the accepted inherent disadvantage experienced by Aboriginal and Torres Strait Islander people, a good number of Indigenous organisations are also able to obtain deductible gift recipient (DGR) endorsement by becoming a particular type of charity known as a Public Benevolent Institution (PBI).

This article explores how Indigenous organisations can register as a charity with the ACNC, and the legal structure open to some Indigenous charities through the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (CATSI Act).

Like many organisations established to address the needs experienced by a particular disadvantaged group, Indigenous organisations can be ‘for’ Aboriginal and Torres Strait Islander people or ‘of’ Aboriginal and Torres Strait Islander people (or both). Being ‘of’ indicates the organisation is made up of and controlled by Aboriginal and Torres Strait Islander people, while ‘for’ indicates the organisation is for the benefit of Aboriginal and Torres Strait Islander people but may not directly involve Aboriginal and Torres Strait Islander people. As practitioners in the charity and social sector, we have observed a marked increase in organisations established ‘of’ Aboriginal and Torres Strait Islander people which genuinely involve Aboriginal and Torres Strait Islander people in the governance and operations of the organisation.

Obtaining Charitable Status as an Indigenous Charity

While a requisite degree of Indigenous control is required under an Aboriginal and Torres Strait Islander Corporation (see below) or to be eligible to access certain government funding streams, such control is not a requirement for registration as a charity with the ACNC.

Organisations applying for registration as a charity must register under one or more of the 14 charitable subtypes.

As outlined in the ACNC Commissioner’s Interpretation Statement for Indigenous Charities (ACNC CIS), for Indigenous organisations addressing Indigenous disadvantage, it is accepted their charity registration will fall under the subtype of ‘advancing social or public welfare’. There is a presumed charitable purpose, even if an organisation does not use the term ‘Indigenous disadvantage’.

Indigenous charities may also or alternatively register under other subtypes depending on their core objective or reason for existence, some include:

• organisations promoting Aboriginal and Torres Strait Islander culture and customs may register under ‘Advancing Culture’;
• organisations committed to preventing and relieving sickness and disease in Aboriginal and Torres Strait Islander communities may register under ‘advancing health’ or consider registration as a ‘Health Promotion Charity’;
• organisations committed to advancing education for Aboriginal and Torres Strait Islander people may register under ‘Advancing Education’; and
• organisations committed to promoting reconciliation may register under ‘Promoting Reconciliation, Mutual Respect and Tolerance Between Groups of individuals in Australia’.

It is important to remember a charity can have more than one charitable purpose.

Public Benefit Test

All registered charities, regardless of their subtype, must satisfy certain requirements associated with the definition of charity. To meet the definition of charity under the Charities Act 2013 (Cth) (Charities Act), one of the requirements is for the entity to have all of its purposes as charitable purposes for the public benefit (and any non-charitable purposes to be incidental or ancillary to, and in aid of its charitable purpose(s)). A charity will be for the public benefit if the benefit is for the public or for a sufficient section of the public. To learn more about the public benefit test, read our article ‘Understanding public and private benefit for charities: Getting it right’.

An issue that has arisen in the past for Indigenous organisations receiving, holding or managing native title and other Indigenous land rights is the passing of the public benefit test. This is because these organisations may have membership or beneficiaries which are described in terms of their family relationships or as descent from named  ancestors for a native title group or traditional owner group. To help combat this issue, the Charities Act recognises organisations holding, receiving or managing native title or Indigenous land rights pass the public benefit test, even if the section of the public receiving the benefit is limited in this way.

Incorporating as an Aboriginal and Torres Strait Islander Corporation

Aboriginal and Torres Strait Islander corporations are corporations governed and controlled by Aboriginal and Torres Strait Islander people. The CATSI Act provides the legal structure and governance standards under which these corporations operate.

What is an Aboriginal and Torres Strait Islander corporation?

Similar to a company limited by guarantee or proprietary limited company, an Aboriginal and Torres Strait Islander corporation is a corporation and a separate legal entity. The key differences are Aboriginal and Torres Strait Islander corporations are governed under CATSI Act, rather than the Corporations Act. The regulator for Aboriginal and Torres Strait Islander corporations is the Registrar of Indigenous Corporations, which is supported by Office of the Registrar of Indigenous Corporations (ORIC). Organisations incorporated under the CATSI Act must be owned and controlled by Indigenous Australians. While the organisations rulebook/constitution can mandate a higher percentage, the law requires a majority of members and a majority of directors to be Aboriginal or Torres Strait Islander. The name of the organisation must also include one of the following phrases:

• Aboriginal corporation;
• Torres Strait Islander corporation;
• Aboriginal and Torres Strait Islander corporation;
• Torres Strait Islander and Aboriginal corporation; or
• Indigenous corporation

This table sets out some key distinctions between corporations under the Corporations Act and CATSI Act to consider when deciding whether to register as an Indigenous organisation.

There are a variety of other differences for Indigenous organisations to consider. Take a look at this helpful factsheet put together by ASIC and ORIC on some differences between the two pieces of legislation to learn more.

Reporting to the ACNC as an Aboriginal and Torres Strait Islander Corporation

ORIC and the ACNC act collaboratively to minimise some of the regulatory burden on Aboriginal and Torres Strait Islander Corporations. If an Indigenous charity is registered as an Aboriginal and Torres Strait Islander Corporation, they are required to complete financial reporting with ORIC, who will then pass along the relevant information to the ACNC. The depth of reporting obligations is determined by the size of the Aboriginal and Torres Strait Islander Corporation.

For more information on Aboriginal and Torres Strait Islander Corporations, you can access the ORIC website.

How can we help?

To learn more about how your Indigenous organisation might obtain charitable status, and whether registering as an Aboriginal and Torres Strait Islander Corporation may be appropriate, get in touch with our specialist Charities + Social Sector Lawyers.