Australian Charities and Not-for-profits Commission
Some churches 'run more like cults'
March 21, 2013
INVESTIGATORS with the new Australian Charities and Not-for-profits Commission are probing numerous alleged breaches, including serious fraud and misleading behaviour, in a historic clean-out of non-compliant charities.
The ACNC, established in December, has set up a team staffed by experienced former law-enforcement officers, auditors and risk managers to investigate complaints.
some churches and other tax-exempt religious groups were run primarily to benefit their leaders
Andrew Sealey, director of strategic intelligence and compliance, said the ACNC had received 62 referrals from the public and other regulatory bodies and 25 investigations were still open.
State and federal police and other law-enforcement bodies were referring matters to the 11-person team, closing a gap that had existed in the regulation of charities.
Mr Sealey said the greatest number of complaints, up to 30 per cent, related to allegations charity workers had received private benefits from donated funds.
The team was also investigating a number of cases where charities had engaged in suspected fraudulent activity, posted misleading website information and undertaken activities not within their stated purpose.
"The most complex and serious cases being investigated by the ACNC have some common characteristics, including complex structures such as linked organisations controlled by family members or close associates and significant state and commonwealth government funding," Mr Sealey told The Australian.
He said he expected complaints to spike once charities began to file more detailed financial information statements from July 1 under reforms to the charity and not-for-profit sector.
The news of the investigations comes as a member of the ACNC advisory board, David Crosbie, warned that some churches and other tax-exempt religious groups were run primarily to benefit their leaders. "I would see them as operating more like cults than religious orders," he said.
Mr Crosbie, chief executive of the Community Council for Australia, has called for a public benefit test to be applied to bodies seeking tax-exempt status where there were concerns they were failing to deliver any positive impact on the community.
The council represents key organisations in Australia's not-for-profit sector, which contributes $43 billion to the national economy and employs more than a million people.
Mr Crosbie said it was grossly unfair churches did not have to prove public benefit to gain tax deductibility while more than 15,000 organisations were registered charities but could not provide donors with a tax deduction, because of archaic rules and bloated bureaucracy.
The system governing tax deductibility status was "a confusing mess with one rule for some and one rule for others", he said.
At the heart of the problem was the definition of charity in Australia. Churches were automatically regarded as charitable organisations, under an old English law, the Charitable Uses Act of 1601.
"It's appalling that we are still relying on laws developed in the UK back in the 1600s to determine who gets access to tax deductions," Mr Crosbie said.
Thousands of charities, meanwhile, could not meet the $30,000 application costs to get deductible gift recipient status from the Australian Taxation Office.
Mr Crosbie called on the government to force the trustees of Australia's 7000 charitable family trusts to reveal their fees and charges, which were currently not reported, amid concerns professional trustees were treating the funds as their own.
Disclaimer:This news page is about groups, organizations or movements, which may have been called "cults" and/or "cult-like" in some way, shape or form. But not all groups called either "cults" or "cult-like" are harmful. Instead, they may be benign and generally defined as simply people intensely devoted to a person, place or thing. Therefore, the discussion or mention of a group, organization or person on this page, is not necessarily meant pejoratively. Readers are encouraged to read widely on a topic before forming an opinion. Never accept information from a single source at face value. This website only holds a small amount of information and should not be relied on as a complete source. For example, if you find older information, this should be weighed up against newer information as circumstances can change.