This is part five of a series on the Hillsong whistleblower files. Read the full series here.
The Hillsong whistleblower papers tabled in federal Parliament spell out for the first time the extent of Hillsong assets which for years have been held in secretive religious charities. The revelations are likely to increase the pressure on the federal government to change the laws which have put a special category of charities, the Basic Religious Charity (BRC), effectively beyond the reach of the regulator.
As Crikey readers will know, the BRC is a sweet deal for the churches. The Australian Charities and Not-for-profits Commission (ACNC) has no power to remove a director of a BRC and the BRC is not required to provide any financial information to the regulator or the public. It is effectively a legal and financial black hole.
But how “basic” are Hillsong’s BRCs?
Courtesy of the Hillsong whistleblower’s disclosures, we now know that tens of millions of dollars pass through Hillsong’s basic religious charities.
The HC Australia Property Trust holds assets of $68 million. Another, the Trustee for Community Venues, holds $23 million in assets. Both exist only to hold church properties — Community Venues owns Melbourne’s Festival Hall.
The whistleblower questions the charities’ bona fides as BRCs.
“It is unclear how the [trusts] which exist solely to hold the property of Hillsong can be categorised as Basic Religious Charities by the ACNC, thus allowing them to ‘hide’ their financials from both the ACNC and the public,” the whistleblower concluded in a summary document tabled in Parliament.
A third charity, the Trustee for Hillsong International — the music and resources arm of Hillsong in Australia — had total income of $42 million in its 2021 accounts and held assets valued at $29 million.
Its main source of income was $12 million in royalties on Hillsong music. It also received “donations” of $11 million, all coming from other Hillsong-related entities and affiliated churches.
The whistleblower raised the question of whether the charity should in fact be classified as a business and therefore be taxed.
“If the only ‘donations’ Hillsong International receives are from other Hillsong-related entities, it receives no donations from the general public, and its commercials are material, it is possible [the charity] should be classified as a business. At the very least Hillsong International could be considered ineligible to be registered as a BRC with the ACNC,” the whistleblower wrote.
The sheer size of the assets held in the three BRC’s — collectively over $100 million — begs the question of how Hillsong’s charities could be even remotely considered “basic”.
The answer to that is that the legislation does not limit the size of a basic religious charity due to a triumph in lobbying by religious interests when legislation was enacted in 2012.
The Hillsong disclosures show how inadequate the laws are when it comes to protecting the public interest.
An end to secrecy
Many churches, not just Hillsong, have jumped onto the BRC bandwagon. The latest official data shows that 30% of Australia’s 46,500 charities describe themselves as having a religious purpose. Of these 15,000 or so religious charities well over half (8400) have signed on as BRCs.
One of the most powerful arguments to end the secrecy around BRCs stems from the Royal Commission into Institutional Responses to Child Sexual Abuse which demonstrated a need for greater transparency and accountability.
One of the royal commission’s six commissioners, Robert Fitzgerald — also a leading figure in the charities sector — has argued for the end to BRC’s and the secrecy they give. (Fitzgerald is also a former productivity commissioner and was inaugural chair of the ACNC advisory board when it was established in 2012.)
Fitzgerald cites three elements essential to the good functioning of an organisation — governance, leadership and culture — all of which the commission had found were failing.
“It’s not just about child sexual abuse. It’s really about how we govern for the vulnerable,” Fitzgerald told a charities conference in 2018.
Overhaul of regulator
Adding to the urgency for change, the record shows that the chances of a religious organisation being caught out by the charity regulator are virtually nil.
The agency’s latest records show that in a 12-month period, only 96 investigations were completed into complaints made about Australia’s charities. A grand total of 15 charities had their status revoked. This equates to 0.025% of ACNC’s 60,000 registered charities.
There’s another protection built into the ACNC design too: the regulator, by law, cannot comment publicly on individual charity cases, no matter how much it would be in the public interest to do so.
What, though, are the chances of either major party taking on the BRC issue given the risk of alienating the large churches and possibly the faith vote?
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