The experts in
not for profit

Charities and elections

Hand of a person casting a vote into the ballot box during elections

The next Australian Federal Election is due this year and with it comes the opportunity for charities and not for profit organisations to consider how they engage in the country’s political landscape.

A recent column from Dr Gary Johns, head of the ACNC, highlights the need for NFPs to understand the rules and make sure “any advocacy or campaigning complies with ACNC guidelines and does not threaten the charity’s registration.”

AFG Account Manager Kathy Tung outlines key aspects that organisations should be mindful of when they are campaigning, as there can be a fine line between what is appropriate and what is a de-registerable action.

Happy volunteers fixing the donation box

Advocacy vs electioneering

There is a definite distinction between advocating for your organisation’s cause and electioneering… and this is where organisations can come into trouble. If you produce material that is deemed to be promoting or opposing a political party or political candidate, this is recognised as a “disqualifying political purpose” and is not permitted by the ACNC. Kathy explains:

“It’s critical that organisations are really clear on where the line is between advocacy and electioneering. For example, telling people how to cast their vote in any form, including saying ‘vote X last’ is recognised as electoral and not allowed.

But if you produced a scorecard on how all the different parties or candidates rate on the issues relevant to your organisation’s charitable purpose, this is deemed acceptable.

Understanding your organisation’s strategic position in relation to advocacy vs electioneering and how close you want to be to that boundary is crucial. It should be an open conversation with your Board, as it can risk losing ACNC registration. It can be confusing, so we definitely recommend engaging professional advice if in doubt.”

Blurred man in a conference with microphones

Public communication

Most not for profits regularly communicate with their network and the wider community. Debating important issues and current topics is often part of highlighting your mission… but you will want to make sure that anyone within your organisation appreciates the implications of political discussions and is aware of the difference between advocacy and electioneering. Kathy says:

“Make sure that anyone who might be involved with public communications on behalf of the organisation is properly briefed – from the CEO right through to the people moderating your social media accounts. Be aware of whether any communications coming from your organisation require authorisation.”

woman sit at desk manage household expenses expenditures paying bills on laptop online

Electoral expenditure

“You might not know it but there are a lot of terms in the Electoral Act that appear to be common language, but under the law have very specific definitions. This includes terms such as ‘Electoral Expenditure’, ‘Electoral Matter’ and ‘Financial Controller’. It’s best not to assume that you know all the definitions.”

The Australian Electoral Commission (AEC) defines electoral expenditure as:

“expenditure incurred for the dominant purpose of creating and/or communicating electoral matter.”

For a not for profit to engage in electoral expenditure, it needs to be a deliberate and strategic choice. Kathy says:

“If you choose to do it, you should make sure you understand and follow all compliance requirements. Some of these things will need to be set up in advance such as a separate bank account, making sure your accounting systems are prepared for administering this and collecting all the required information when it comes to disclosure time.

You also need to be across all your disclosure obligations so that you can be properly prepared for them. This includes keeping all stakeholders informed, remembering that all AEC disclosures are publicly available information.

For example, registered charities must provide details of all amounts – including loans – received over the threshold if the income was used, in whole or in part, to incur electoral expenditure.

This can really impact your relationship with your donors if their funds were used for electoral expenditure and you published their full names and addresses without their knowledge – they would also have disclosure obligations of their own.”

If you’d like to read more information about complying with Commonwealth electoral laws, you can visit the Human Rights Law Centre website.

Here at Accounting For Good, we have a team of highly skilled NFP accounting specialists… unmatched in our technical knowledge and expertise. Helping NFPs and social enterprises to be sustainable is our motivation. If you’d like to find out more about our not for profit accounting services, please contact us today.

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