Structuring and restructuring nonprofit associations

In the mid seventies there was a spate of legal claims involving unincorporated not-for-profit associations. These claims highlighted the liability exposure of management committee members and prompted a dramatic increase in the number of associations seeking shelter behind the corporate veil. Corporate structure decisions during this period were primarily motivated by the incentive of limited liability. Twenty years later, the not-for-profit sector is subject to new challenges. The Industry Commission Report into Charitable Organisations in Australia heralds an increasing intrusion of legislative responsibilities and reform in the sector. The traditional sources of funds for not-for-profit organisations are about to radically change with the advent of “competitive tendering” for government funding and the declining benevolence of society. The legal scuffle between Australian Rugby Football League Limited (the “ARL”) and News Limited has also exposed the vulnerability of not-for-profit groups and the many legal and commercial minefields in structural decision-making. The sector is beginning to respond to these pressures by rationalisation and restructure. Corporate structure decisions are now motivated by the need to promote efficiency and resilience. Survival of the fittest. Restructuring is by no means a task for the faint-hearted. A delicate balance between legality and practicality needs to be maintained. The focus of this paper is on the restructuring choices for not-for-profit organisations and groups in Queensland. It answers “how-to” questions and identifies some important restructuring issues.

Charity tax exemptions : a stitch in time saves nine

The Industry Commission has recently released a wide ranging draft report on charitable organisations. Part of the Inquiry's terms of reference required the Commission to examine the appropriateness of the taxation treatment of charities. The findings of the draft report when combined with the recommendations of the Federal Parliament's Follow the Yellow Brick Road Report point to a systematic review by the Australian Tax Office (ATO) of its dealings with charitable organisations. Generally prevention rather than cure is the better strategy in taxation issues. This article raises a number of issues charitable organisations might consider as part of their prevention strategy. As the ATO administers all the taxes discussed in this article and as the tests for exemption are similar, charitable organisations should find that "getting it right" for one tax means that their affairs will be in order for most taxes.

Charities and the industry commission

On 27 October 1994 the Industry Commission (the Commission) handed down a draft report on its inquiry into charitable organisations. The Commission had spent nearly 12 months investigating community social welfare organisations (CSWOs) including the appropriateness of the present taxation treatment of charitable organisations. The draft report makes recommendations for the taxation of CSWOs including alterations to their exemption from sales tax, fringe benefits tax and other indirect taxes with alterations to the threshold of tax deductible gifts and range of organisations qualifying for public benevolent status. This article examines the current taxation treatment for these organisations and the recommended changes made by the Industry Commission.

An Italian legal case note

The present paper intends to enlighten a particular aspect of charitable organizations which is their registration in the regional lists for voluntary organizations. The aforementioned decision ruled that these organizations are entitled to adopt the form of cooperative society and consequently, when all the other legal requirements are complete, charitable organizations are to be enrolled. The registration has been subject to many criticisms and it is necessary to bring some light on a topic that hides behind it many legal and cultural repercussions concerning the role and the activities of nonprofit organizations in the Italian context.

A taxing definition — a comment on the industry commission's draft proposals for defining community social welfare organisations

The draft report of the Industry Commission's charitable organisations inquiry introduces a new term for nonprofit organisations delivering human services. The new term is "community social welfare organisation" or "CSWO". The report recommends that tax deductibility of donations be extended such organisations. It then hints at making the definition of CSWO a standard criteria for state taxation exemptions. This paper examines the definition of the new term community social welfare organisation and charts its possible consequences if adopted by the federal government. The promise of tax deductibility status to previously shunned organisations is largely illusory. The Commission's aim of simplification through clarification of the definition is flawed and will not reduce the administration costs for the Australian Tax Office (ATO) or organisations.

Making the Commission transparent : volume 2

In late 1993 the Federal Government required the Industry Commission to inquire into charitable organisations. We have previously raised issues about the scope and nature of the inquiry process. These issues are: - the appropriateness of the Commission to undertake the inquiry, - the limited time span given the breadth of the inquiry, - and the non-explicit disclosure of the intellectual framework and methodology to be employed in the inquiry.

A select and annotated bibliography of nonprofit taxation

It seems likely that the Industry Commission Inquiry on Charitable Organisations will include a reference to examine the state of taxation and charities. There will no doubt be discussions on the taxation benefits enjoyed by charities. These benefits include not only the exemption from being liable for income tax and enjoying the status of being a "deductible body" for the purpose of gifts, but also fringe benefits tax, sales tax, land tax, stamp duty, financial institutions duty, local government rates and charges as well as electricity, gas, telephone and motor vehicle concessions.

Gifts, the law and functional rationalism

This paper examines the legal facilitation (or rather lack of facilitation) of gifts. The emerging western political ideology of welfare is based on the premise that nonprofit organisations are to play a far greater role in the delivery of welfare services. This role will be enabled in part by increased gifts. The ideology has not addressed the fundamental hostility of the law to the facilitation of gifts. The nature of the legal obstruction of such gifts is compared to equivalent commercial transactions, the reasons given for this obstruction are analysed and the appropriateness of such nonfacilitation is challenged. A state that does not alter the legal hostility to gifts may find that organisations do not attain their expected role in the changing welfare state.

Impact of the introduction of machine gaming in Queensland on minor and major bingo

Material for this paper comes from as report commissioned by the Department of Family Services, Aboriginal and Islander Affairs. The report is the result of a multi strategy research project designed to assess the impact of gaming machines on the fundraising capacity of charitable and community organisations in Queensland. The study was conducted during the 1993 calendar year. The first Queensland gaming machine was commissioned on the 11 February, 1992 at 11.30 am in Brisbane at the Kedron Wavell Services Club. Eighteen more clubs followed that week. Six months later there were gaming machines in 335 clubs, and 250 hotels and taverns, representing a state wide total of 7,974 machines in operation. The 10,000 gaming machine was commissioned on the 18 March, 1993 and the 1,000 operational gaming machine site was opened on 18th February, 1994.

Taxing charities : reform without reason?

The proposal to tax the unrelated business income of charitable organisations was announced in the 2011 budget, but the course of events has overtaken the stated policy rationale. We identify and discuss the policy for the imposition of the new tax and demonstrate that the measure is unnecessary given a recent judgement by the High Court, establishment of a new charity regulator and a better understanding of the applicable tax theory.

Wrong way go back! Rediscovering the path for charity law reform

Problems with charity law jurisprudence persist. The difficulties arose in the 20th century and are fundamental to the way the doctrine is presently theorised. They grew out of the approach taken in Pemsel’s Case to the categorisation of the ‘spirit and intendment’ of the Preamble to the Statute of Charitable Uses. Recent statutory reforms, such as the Charities Act 2006 (Eng&W), have compounded the underlying problems rather than resolving them. This paper aims to stimulate thinking about a new foundation for charity jurisprudence – while the approach may seem radical, the paper argues that these new foundations can be discerned underlying the current jurisprudence. The difficulties can be overcome by rediscovering the underlying jurisprudence which is disregarded in the current approach to categorisation. Giving voice, in contemporary language, to that foundational jurisprudence, this paper provides a way out of the current problems. It also provides an alternative way of conceptualising the doctrine of charitable purpose to guide reform.

Default, deadlock and remedies

The primary purpose of this chapter is to examine the effectiveness of common default provisions and the range of common law and equitable remedies available to a joint venture partner in the event of default by a co-venturer. Because of the various joint venture vehicles such as trusts, corporations, partnerships and others, it is proposed to deal only generally with these questions.

Who's asking for what? Fundraising and leadership in Australian nonprofits

The nonprofit funding landscape is in flux. Many organisations are having to think differently and develop fresh skills either to enter the fundraising market or to cope better with rising competition for community and corporate support. This new reality affects boards, CEOs and fundraisers alike. Against this backdrop, our exploratory study aimed to build an evidence base and spark more discussion about: - the role Australian nonprofit CEOs and boards play in supporting fundraising/development; - current engagement levels; and - perceptions of leadership in fundraising from two possibly contrasting perspectives: NP leaders (board members and CEOs); and fundraisers. This research has been supported by the Perpetual Foundation, the EF and SL Gluyas Trust and the Edward Corbould Charitable Trust under the management of Perpetual Trustee Company Ltd.

Studies of the off-field behaviours of sportspeople : are sponsors' objectives at risk?

The research reported here addresses the problem of athlete off-field behaviours as they influence sports’ sponsors, particularly the achievement of sponsorship objectives. The question arises because of incidents of sponsorship contract cancellation following news-media reporting of athletes’ off-field behaviours. Two studies are used to investigate the research question; the first establishes the content of news-media reports, and the second tests the effects of news’ reports on athlete, team and sponsor evaluations using an experimental design. Key assumptions of the research are that sponsorship objectives are principally consumer-based and mediated. Models of sponsorship argue that sponsors aim to reach and influence consumers through sponsees. Assuming this pathway exists is central to sponsorship activities. A corollary is that other mediators, in this case the news-media, may also communicate (uncontrollable) messages such that a consumer audience may be told of negative news that may then be associated with the sponsor. When sponsors cancel contracts it is assumed that their goal is to control the links between their brand and a negative referent. Balance theory is used to discuss the potential effects of negative off-field behaviours of athletes on sponsor’s objectives. Heider’s balance theory (1958) explains that individuals prefer to evaluate linked individuals or entities consistently. In the sponsorship context this presents the possibility that a negative evaluation of the athlete’s behaviour will contribute to correspondingly negative evaluations of the athlete’s team and sponsors. A content analysis (Study 1) was used to survey the types of athlete off-field behaviours commonly reported in a newspaper. In order to provide a local context for the research, articles from the Courier Mail were sampled and teams in the National Rugby League (NRL) competition were the focus of the research. The study identified nearly 2000 articles referring to the NRL competition; 258 of those refer to off-field incidents involving athletes. The various types of behaviours reported include assault, sexual assault allegations, driving under the influence of alcohol, illicit drug use, breaches of club rules, and positive off-field activities (i.e., charitable activities). An experiment (Study 2) tested three news’ article stimuli developed from the behaviours identified in Study 1 in a between-subjects design. A measure of Identification with the Team was used as a covariate variable in the Multivariate Analysis of Covariance analysis. Social identity theory suggests that when an individual identifies with a group, their attitudes and behaviours towards both in- and out-group members are modified. Use of Identification with the Team as a covariate acknowledges that respondents will evaluate behaviours differently according to the attribution of those behaviours to an in- or out-group member. Findings of the research suggest that the news’ article stimuli have significant, large effects on evaluations of athlete off-field behaviour and athlete Likability. Consistent with pretest results, charitable fundraising is regarded as extremely positive; the athlete, correspondingly, is likable. Assault is evaluated as extremely negative, and the athlete as unlikable. DUI scores reveal that the athlete’s behaviour is very negative; however, the athlete’s likability was evaluated as neutral. Treatment group does not produce any significant effects on team or sponsor variables. This research also finds that Identification with the Team has significant, large effects on team variables (Attitude toward the Brand and Corporate Image). Identification also has a significant large effect on athlete Likability, but not on Attitude toward the Act. Identification with the Team does not produce any significant effects on sponsor variables. The results of this research suggest that sponsor’s consumer-based objectives are not threatened by newspaper reports linking athlete off-field behaviour with their brand. Evaluations of sponsor variables (Attitude toward the Sponsor’s Brand and Corporate Image) were consistently positive. Variance in that data, however, cannot be attributed to experimental stimuli or Identification with the Team. These results argue that respondents may regard sponsorships, in principle, as good. Although it is good news for sponsors that negative evaluations of athletes will not produce correspondingly negative evaluations of consumer-based sponsorship objectives, the results indicate problems for sponsorship managers. The failure of Identification with the Team to explain sponsor variable variance indicates that the sponsor has not been evaluated as a linked entity in a relationship with the sporting team and athlete in this research. This result argues that the sponsee-mediated affective communication path that sponsors aim use to communicate with desirable publics is not necessarily a path available to them.