Country Idealist Profiles

Language Used to Describe Non-Profit Organizations

The language used to describe non-profit organizations in the Northern Territory has been a topic of discussion and disagreement.  There seems to be a lack of clarity around preferred language and agreed-upon definitions.  Language used includes:

  • Non Profit or Non Profit Organisation

  • Charity, Public Charity or Charitable Organisation

  • Public Benevolent Institution

  • Community Organisation

  • Community Service Organisation

  • Not-For-Profit Organisation

  • Income Tax Exempt Charity

Although the wording and reach of the individual provisions vary, taxing statutes in Australia exempt a range of private organisations or community associations with objects or purposes which are “non-profit” (in terms of not distributing profits, surplus funds or assets to members). Some statutes, especially those relating to income, land, pay-roll and local government taxes, cover a very wide spectrum, expressly exempting bodies such as religious institutions; private schools; sporting clubs; agricultural societies; registered employer and employee associations; friendly societies; private hospitals and nursing homes; and public benevolent institutions and/or public charities.


In relation to welfare organisations, the courts have interpreted the term “public benevolent institution” narrowly (but sensibly), adopting a concept similar to the ordinary or common meaning of public charity. So its meaning has been limited to organisations established and carried on for “the relief of poverty, sickness, suffering, distress, misfortune, destitution or helplessness”, such as the Salvation Army or Red Cross. In this context poverty is a relative term and beneficiaries do not have to be destitute, simply needy.

In contrast, there has been a very broad interpretation of the “public charity” category. Rather than apply its ordinary or popular meaning, the courts use the common law “legal” meaning. This bizarre definition includes any non-profit organisation with objects exclusively for “the relief of poverty; the advancement of education; the advancement of religion; or other purposes beneficial to the community, not falling under any of the preceding heads, and even if, incidentally, they benefit the rich as well as the poor”. In applying this definition, the courts also have classified as charitable many activities having little real connection with poverty, education or religion, and/or where the benefit to the community has been only minor, indirect or remote. Some examples include relatively exclusive, well-resourced, Church-run retirement homes which charge occupants large sums to rent or acquire units; the College of Law (NSW), which provides pre-admission practical training for law graduates and continuing legal education for practicing solicitors; and the McGarvie Smith Institute, which manufactures and sells vaccine to prevent disease in livestock for a profit.


Given this generosity of the legislature and judiciary, poorly funded Aboriginal organisations should have been prominent in the express statutory exemptions, especially those bodies providing essential services to their needy communities and thus the most meritorious claimants for taxpayer subsidy. Yet there are no general exemption categories for Aboriginal groups at all.


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