Bicycle Network: Our Organisation

Charity status gets final tick

28 July 2011. Bicycle Network Victoria has won its right to be recognized as a charity, after the Australian Tax Office discontinued its legal battle against the move.

The ATO had until last Friday to appeal the decision of the Administrative Appeals Tribunal, which granted Bicycle Network Victoria the status after prior rejections by the ATO.

Bicycle Network Victoria CEO, Harry Barber said the outcome was a victory for members and for the community.

“We had made the case to the Australian Tax Office (ATO) that the work that we do and the reason that we do it means that we should be considered a Health Promotion Charity – a category of Charity established in 2001.

“A health promotion charity is defined a charitable institution whose principal activity is to promote the prevention or the control of diseases in human beings.

“In establishing the category the Howard government recognised the importance of ‘promoting good health in Australia’ through ‘educating Australians about matters such as diet, lifestyle and disease’.

“Today physical activity is ranked second only to tobacco control as the most important factor in disease prevention in Australia.”

Mr Barber said that over the last ten years governments have begun to grapple with the idea that promoting physical activity is cheaper than treating the diseases that inactivity triggers. In 2009 the Commonwealth published the report of the Preventative health Taskforce Australia: The Healthiest Country by 2020.

Among many references the Taskforce noted a 2008 study from the USA, Prevention for a Healthier America, which showed ‘that for every US$1 invested in proven community-based disease prevention programs (increasing physical activity, improving nutrition and reducing smoking levels), the return on investment over and above the cost of the program would be US$5.60 within five years.’

“This is the economic argument for the Commonwealth to support Health Promotion Charities like Victoria Walks which is ‘a charitable non-profit organisation promoting the prevention or control of diseases relating to physical inactivity by increasing the number of people who walk.’ 

“Bicycle Network Victoria’s purpose is to ‘promote the health of the community through the prevention and control of disease by “More People Cycling More Often”.

“The ATO rejected our case and we appealed this decision to the Administrative Appeals Tribunal.”

The case turned on a number of legal issues including whether bike riding was a ‘sport’. The Deputy Commissioner found

"The fact that cycling may be a sport in some instances and a leisure activity in another does not characterise Bicycle Network Victoria’s purpose as being for sporting purposes or for recreational purposes as such. It is for the purpose of promoting cycling in all its forms and for the overall purpose of promoting fitness. That is a purpose that has been recognised as charitable. Therefore, I am satisfied that Bicycle Network Victoria is a charitable institution.”

The Deputy Commissioner did not, however, find that we were a Health Promotion Charity.

"My conclusion that Bicycle Network Victoria is a charitable institution does not mean that it is necessarily a charitable institution whose principal activity is to promote the prevention or control of diseases in human beings."

These decisions mean that we are now unambiguously a charity working to benefit the general community. We are able to take donations from supporters but, at the moment, we do not have the standing to offer tax deductibility for donations.

Decision on charity status

13 July 2011. On 24 June the Deputy President of the Administrative Appeals Tribunal handed down her ninety five page finding on our appeal against a previous Australian Tax Office decision.

The Deputy President found that Bicycle Network Victoria’s purpose was the promotion of cycling in all its forms and the overall purpose of promoting fitness, which is a recognised charitable purpose.

In paragraph 195:

“In view of my findings, I am satisfied that the purpose of Bicycle Network Victoria is to benefit the general community.

That leads to the next issue which is whether the promotion of cycling is a charitable purpose.

"Cyclists may, and do, engage in cycling as a competitive sport but sporting activities are only one of the ways in which Bicycle Network Victoria promotes its purpose.

"If it is to encourage more people to cycle more often it has to present the appeal of cycling in many forms. The other forms in which it presents it are as transport and as a recreational activity.

"The presentation of cycling in these various forms is part of its strategy to encourage cycling just as agitating for a safe environment in which they may do so is part of it.

"The fact that cycling may be a sport in some instances and a leisure activity in another does not characterise Bicycle Network Victoria’s purpose as being for sporting purposes or for recreational purposes as such.

"It is for the purpose of promoting cycling in all its forms and for the overall purpose of promoting fitness. That is a purpose that has been recognised as charitable.

"Therefore, I am satisfied that Bicycle Network Victoria is a charitable institution.”

Bicycle Network Victoria is considering the decision.

Tax office asked to grant charity status

In order to strengthen the organisation’s ability to pursue its purpose Bicycle Network Victoria is applying for formal status as a health promotion charity. This application is being reviewed by the Tax Office.

This status will allow us, among other advantages, to increase the number of revenue streams that support our purpose. For example with this status members will be able to make tax deductible donations to campaigns, programs and projects. The organisation will also be able to apply to philanthropic trusts.

Only certain organisations and funds attract tax deductibility for gifts of $2 or more. These include 'health promotion charities' which have been recognised by the Tax Office as deductible gift recipients under the Income Tax Assessment Act 1997.

A health promotion charity is a charitable institution whose principal activity is to promote the prevention or the control of diseases in human beings.

A charitable institution has to:

• have charitable purposes
• be a not for profit
• be an institution
• exist for the public benefit.

A disease from the Tax Office point of view is any physical or mental ailment, disorder, defect or morbid condition whether of sudden onset or gradual development and whether of genetic or other origin.