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The AAT (Downes J, President) has held that Aid/Watch Incorporated, a body that researches, monitors and campaigns about the delivery of overseas aid, is a charitable institution for income tax purposes, and therefore exempt from tax. The AAT said, at paras 5-7 of its reasons:

"5 The object of Aid/Watch is to promote the effectiveness of aid, both by ensuring that it is delivered where it is intended and by ensuring that its delivery is environmentally effective. The test of charitableness is whether activity advances or promotes a charitable object. Taking steps to ensure that aid provided by others is provided in such a way as to maximise the public benefit would seem to be charitable in itself. This must be so even if the purpose is the sole purpose of the charity and is not incidental to actual aid delivery.

6 An institution which promotes a political party or seeks changes in the law will not be charitable if these are its main objects. However, Aid/Watch has no such objects. The provision of overseas aid is authorised by the Parliament and is important government policy. So is the protection of the environment. A purpose of promoting the efficient delivery of aid, or of promoting its delivery in an environmentally effective way, is not opposing government policy, but encouraging it. Proposing to government different priorities for purposes already part of government policy neither seeks a change in the law nor even of policy. Whether an activity is charitable depends upon the activity not the actor. Accordingly, private institutions promoting government activities which have objects which are objectively charitable will not cease to be charitable because the activities they are promoting are activities of government.

7 In summary, the work of Aid/Watch, as provided for in its objectives and as carried out in practice, combines the charitable objects of relief of poverty and advancement of education. To the extent that its main objects are outside these objects they are otherwise beneficial to the community. The objects are charitable notwithstanding the fact that Aid/Watch does not itself provide aid and it is not deprived of charitable status because it seeks to influence the amount of government aid and the way it is distributed."

Aid/Watch Incorporated and FCT [2008] AATA 652 (AAT, Downes J, President, 28 July 2008).
For a copy of the decision, go here

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