This is part of a series on charities in Australia. Read more of the series here.
Several Hillsong Church entities have enjoyed the benefit of total secrecy and almost a complete lack of accountability to the federal government regulator, due to being classified as basic religious charities (BRCs).
However, events triggered earlier this year threaten to undo the special governance and tax exemptions pivotal to the church’s financial success. Hillsong might have generated millions and millions of dollars through various revenue streams, but it has maintained its charity status because it says the purpose of all that money is to advance religion.
We now know, courtesy of a court filing made by Hillsong finance and governance staff member Natalie Moses, that several Hillsong charities have been under investigation by the Australian Charities and Not-for-profits Commission since March this year. This coincides with the period when the church’s founder, pastor Brian Houston, was forced to step aside after revelations of “moral transgressions”. Houston’s fall from grace led to huge internal ructions, with several US Hillsong entities deserting the Houston ship.
The multinational corporate enterprise that is Hillsong Church operates a maze of charities in Australia, with 18 separate entities receiving various tax exemptions.
Moses’ court filing reveals that the ACNC has been investigating two Hillsong charities with BRC status. (There are two other BRC entities in the Hillsong group.)
It means the ACNC has finally sprung into action to peer inside what are effectively black holes of key financial and governance information. Moses’ statement of claim points to a host of irregularities in the movement of money between Hillsong’s entities — pointers that have no doubt helped steer ACNC investigators in the right direction.
The investigation by the regulator — along with Moses’ whistleblowing — may threaten key elements of the church’s financial viability.
At the same time, the investigation, belated as it is, raises questions about why it took the ACNC so long to act — as well as about the rules the regulator works with, not only in relation to Hillsong but also to other large churches whose operations are cloaked in the secrecy of BRC status. (Organisations assess themselves as being eligible for BRC using five criteria.)
If Hillsong has hidden behind the secrecy of a BRC to move assets around tax-free and without accountability, then what of others?
The serious risk to Hillsong
Hillsong operates four charities that, as BRCs, are not required to file any financial information to the regulator. Nor can any of the charity’s directors be removed.
The defining feature of a BRC is that the entity’s purpose is “the advancement of religion”. So how do Hillsong’s BRCs measure up?
- Community Venues Ltd was registered as a BRC in 2021. According to Moses’ federal court statement, the entity is the owner of Melbourne’s Festival Hall, acquired by Hillsong for $23 million. Moses’ statement of claim questions how Community Venues got the money to carry out renovations on Festival Hall, alleging that Hillsong’s offer of tax deductions for donations was “fraudulent” as they were “not properly tax deductible”.
- Hillsong Church Australia also has six business names. According to the Australian Business Register, these include food outlets Comma Coffee and Bella Burgers, as well as Hillsong Night School — which charges fees for courses — and Amplified Education Academy.
- The Trustee for Hillsong International encompasses a dozen separate entities that drive Hillsong’s multimillion-dollar music and broadcast operations. They include Hillsong Music Publishing, Hillsong UNITED, Shout! Music and SHOUT! Music Publishing. Hillsong claims that the entity exists to “promote the Christian faith”. However, Moses’ court filing alleges that artists classified as “pastors” received millions of dollars in royalties from music sales.
- HC Australia Property Trust holds and provides properties for the church’s ministries in Australia as well as providies financial support for ministries.
The anomalies bank up
Under the ACNC’s regulations, an entity cannot be a BRC if it could be registered with another subtype (for example, advancing education).
A key question for the ACNC and the government is how exemptions ostensibly intended to take the pressure off small, volunteer-run churches can end up providing secrecy for a multimillion dollar operation — big enough to own and renovate Festival Hall and to run a hugely profitable international music business.
A technical line of defence
Adding to the complicated Hillsong picture, three of the church’s BRC charities are set up as trusts, registered under state law, in NSW. Trust deeds show that the entities are owned ultimately by Hillsong Church Inc, incorporated in Texas, USA.
It raises the question of whether or not the ACNC, which is governed by federal laws, has enforcement powers over a state-registered entity.
The ACNC said it was unable to comment on the circumstances of a particular charity. A spokesperson said that “speaking generally” the ACNC had jurisdiction over all charities registered with the ACNC, in relation to their registration as a charity.
Hillsong has previously said it values “good governance”, that it is co-operating with the ACNC and that it will defend the allegations which have been made in the federal court action.
Crikey two days ago asked Assistant Minister for Competition, Charities and Treasury Andrew Leigh if he plans to address the appropriateness of the BRC exemptions. We have not received a response. Crikey’s request remains open.
how is “the advancement of religion” something you can claim to be charitable activity?!!!
religious organisations already are exempt from tax [something that has to go] – and now i learn that their “charities” don’t have to doing anything useful or good, but can just get away by claiming that their mission is to drag more suckers into the fold
what a racket
I think that the small agencies of local churches operating drop-in centres, soup kitchens, pantries and social help should be reasonably considered exempt as they all operate on a shoestring and volunteer staff
There’s a universre of difference between a Soup Kitchen/Op shop and the likes of the US model of churches.
It’s no mystery. Under the relevant law every charity must perform one or more of the activities listed in the legislation in order to qualify as a charity. Advancing religion is on the list of activities. The activities on the list are there because our elected representatives decided they should be. If you don’t like it, write to your MP. And good luck!
The advancement of religion. Yes, if God = $.
As for the so called “prosperity gospel” according to historian Kate Bowler it emerged in the US from the intersection of three different so called Christian ideologies/cults
Those of Pentecostalism, New Thought together with “an American gospel of pragmatism, individualism, and upward mobility’
Such examples are given by the Robber Baron, Andrew Carnegie’s in his “Gospel of Wealth” together with Russel Conwell’s famous sermon , that of “Acres of Diamonds”, in which Conwell equated poverty with sin and asserted that anyone could become rich through hard work.
This gospel of wealth, however, was also an expression of the Muscular Christianity understanding that such success was to be the result of personal effort rather than divine intervention.
Blessed: A History of the American prosperity gospel / Kate Bowler.
New York, NY Oxford University Press, 2013.
ISBN: 9780199827695. 0199827699
LC: BR1643.5 .B68 2013
grâce à LC, WorldCat,Wikipedia et al.
Does any other totally imaginary thing get the same tax breaks as religion? I’m trying to think of anything else that’s treated the same and I’m coming up a blank.
It’s my understanding that church’s and these religious cults receive tax exemption for there charitable work in the community. What i see in these Pentecostal cults is the pursuit of profit with no discernable help to the poor and needy, so why do they have a tax exemption
Charitable activities are those listed in the relevant legislation. It’s as simple as that. An organisation undertaking one or more of the activities can register as a charity and get tax exemptions. The Charities Act 2013 (Cth) lists twelve charitable purposes:
I don’t think a church in this context is imaginary. It has tangible assets, incomes & expenditures. It’s run by real people in real places. I presume you’re talking about God being imaginary which if it is the case why should he pay tax? Then again massively polluting fossil fuel companies receive plenty of tax payer funded largesse for fake climate change action, farmers get masses of tax write offs for running a normal household as part of their business, how many billions in Jobkeeper payments were given out to companies that didn’t it just to name three rorts in a few minutes. So, in answer to your question, yes, lots of imaginary things get assistance from the tax man.
A good example would be CC$ – how much has the cost so far?
Most of these so called churches do no discernsble good. Was a time when you could see the Salvos hanging around the front line of a war zone but none of the other mobs. Ditto charity works. You dont see the prosperity wonks dishing out soup in the street on cold wet evenings.
Time they lost all these rorts. Might even help the budget a bit. Help pay for the tax cuts we have to have for the billionaires.