Using his House of Representatives environment committee, Liberal MP Alex Hawke has started to scrutinise the use of tax-deductible donations to environmental groups.
More than 600 such groups are deductible gift recipients, which allows them to access tax-deductible donations to fund work to “advance the natural environment”.
Hawke has said, “We need to ensure tax-deductible donations … are used for the purpose intended and expected by the community.” That should be fun. Although the committee wants to scrutinise the extent to which group activities “involve on-ground environmental works”, it will find many do no such thing.
What is more, the definition of an environmental organisation under the Income Tax Assessment Act 1997 states that its principal purpose must be the protection and enhancement of the natural environment, or education, or research about the natural environment.
DGR status through the government’s register is separate from an organisation’s status as a charity; eligibility for income tax and other exemptions are administered by the Australian Charities and Not-for-Profits Commission and the Australian Taxation Office.
The key is whether a charity is beneficial to the community in a way the law regards as being charitable. To substantiate an entity’s charitable purposes, its activities may be considered. It is the role of its activities and the extent to which they further the entity’s purpose that is relevant.
Take a case study. The Worldwide Fund for Nature Australia is a charitable institution on the environmental register. It has started to receive funds from the Thomas Foundation, a private ancillary fund endorsed for DGR, for a political campaign.
In 2013, the Thomas Foundation, established by Cellar-masters founder David Thomas, switched from funding research to politics.
It announced, “This is … the first time the foundation has funded an advocacy program.”
As reported in The Australian last month, the advocacy program, aimed at the World Heritage Committee of UNESCO, is setting out to discredit the government’s alleged lack of protections for the Great Barrier Reef. Thomas has pledged to match two for one every dollar raised by WWF Australia in the Fight for the Reef campaign.
Using this case study, my advice to Hawke and his committee would be to start with first principles. First, tax-assisted donations contradict the voluntary nature of charity. Second, government should be reticent about tax assistance to organisations that seek to promote viewpoints on issues where there is reasonable disagreement in the electorate.
WWF Australia chief executive Dermot O’Gorman was reported in The Australian as saying, “When people overseas find out about the state of the reef and the industrial threat, they are often outraged just as much as Australians.”
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