Accumlation by charities : do Australian legal restraints maintain an intergenerational balance?

Charities matter. They play critical roles in our economies and societies and we expect and receive much from them. The accumulation of assets by charities matters too as it raises profound ethical, economic and social considerations. These considerations are many. How should the public benefits produced by charities and affected by accumulation be shared between different generations? It is, after all, inherent in the notion of accumulation, that the delivery of some benefits will be deferred. Which generation(s) should decide that allocation of benefits? Might the decision-making discretion afforded to charity controllers over accumulation and the allocation of benefits increase agency costs and so reduce the level of public benefit achieved? This thesis examines the role played by legal constraints on accumulation in answering these questions. That is a critical task, as there has been limited doctrinal and normative analysis of the legal constraints upon accumulation by charities, particularly in Australia. It reveals that the legal restraints contain significant gaps in relation to the intergenerational distribution of benefits and to the balance of decisionmaking between generations. In particular, the thesis asserts that, to fill those gaps, there is room for reform to better identify and incorporate normative principles into the rules. Two reforms are proposed. First, charity controllers should be required to have regard to principles of intergenerational justice when exercising their powers, with accompanying mechanisms, such as more fulsome reporting, to support accountability. Intergenerational justice, which articulates the obligations owed to past and future generations including in relation to meeting basic social and economic needs of members of society, thus provides a normative basis for determining intergenerational distributional matters. Second, in the context of balancing decisionmaking between generations, it is argued that charity controllers should be given broader powers to disregard accumulation requirements, so as to afford greater decision-making freedom to current generations. That greater scope ought to apply where, without changing the broad category of charitable purpose, materially greater public benefit would be achieved by a more rigorous or efficient application of principles of intergenerational justice, or by the adoption of different principles of intergenerational justice. This approach is grounded in insights from intergenerational justice and from the cy-près reform debates about creator intent, the achievement of public benefit and disincentivising giving. Both reforms are intended to be implemented in ways that safeguard charity independence from government.