What is a Basic Religious Charity?

A basic religious charity (BRC) is a registered charity that satisfies all of the following requirements:

1. Registered under the Advancing Religion Charity Subtype

A BRC must only be registered (and only be able to be registered) with the ACNC for the purpose of advancing religion.

2. Not Incorporated

A religious institution is not a BRC if it is incorporated under the Corporations Legislation or the Associations Incorporation Act of the relevant State or Territory.

3. Not approved for ACNC Group Reporting

A religious institution is not a BRC if it can report to the ACNC as part of a reporting group for a particular financial year.

4. Not a Deductible Gift Recipient (DGR)

A religious institution is not a BRC if it is registered as a DGR (or operates DGR funds with an aggregated revenue of greater than $250,000).

5. Received Government Grants of less than $100,000

A religious institution is not a BRC if it received more than $100,000 in Government grants in current financial year or in the previous two financial years.

Following the implementation of COVID-19 stimulus packages, the ACNC has confirmed that receipt of Federal Government allowances and COVID-19 disaster payments such as Jobkeeper and Cash Flow Boost will not prevent a charity from being a BRC. That is, the $100,000 Government grant threshold does not include receipt of COVID-19 related funding.

6. Participation in the National Redress Scheme

A religious institution is not a BRC if:

• • The religious institution has not joined the National Redress Scheme;
  • The institution has been identified as being involved in the abuse of a person in an application under the National Redress Scheme (or in response to a request for information from the National Redress Scheme Operator); and
  • The redress application has not been withdrawn.

This requirement was introduced in 2021 following an increased scrutiny into religious institutions in relation to abuse.

Consequences of being a BRC

A BRC has significantly reduced reporting requirements compared to other registered charities. A BRC must still submit an annual information statement (AIS) to the ACNC, however does not have to answer the financial questions and does not have to submit annual financial reports or comply with ACNC governance standards.

The Commissioner of the ACNC cannot remove or replace a responsible person of a BRC.

BRCs are not exempt from receiving concessions available to other registered religious institutions, and must still comply with the ACNC External Conduct Standards.

2018 ACNC Review

In 2018, five years after the introduction of the ACNC, a legislative review was conducted by the Treasury with the goal of reviewing the application of the ACNC Acts and recommending appropriate reforms to enhance the operation of the ACNC.

There were a number of submissions as part of the 2018 review in relation to BRCs, with many parties being proponents for their removal due to the decreased regulatory requirements and transparency available to eligible entities.

Recommendations

As part of their report, the review panel suggested that the reporting requirement for small registered entities (less than $250,000 annual turnover) is reduced to allow for the submission of a simplified balance sheet (rather than a balance sheet that complies with the accounting standards) or a statement of resources with their AIS. The panel stated that if this requirement was accepted by the government, the category of BRC should be removed as the suggested new reporting requirements would not be an onerous transition for BRCs.

Government response

The Federal Government submitted a response paper to the review outlining their response to each of the panel’s recommendations. While the Government accepted the reduced reporting requirements for small registered entities, it stated that it ‘has no plans to review the exemptions for basic religious charities.’ Therefore, the category of BRC remains in place.

Resources

Please see the following resources for further information on BRCs. We would be please to offer any support required in relation to the issues discussed above.

• ACNC website: https://www.acnc.gov.au/for-charities/manage/manage-my-charity-type/basic-religious-charities
• 2018 ACNC Legislative Review: https://treasury.gov.au/publication/p2018-t318031
• Government Response to 2018 Legislative Review: https://treasury.gov.au/publication/p2020-61958