The Australian Charities and Not-for-profits Commission (ACNC) is an independent national regulator of charities. The ACNC was established to ensure the community continues to have trust and confidence in the charity sector.
It is mandatory for charities to be registered with the ACNC before they can apply for charity tax concessions from the Australian Taxation Office. There are many other benefits of registration for charities including having a free online presence on the ACNC Charity Register and being able to demonstrate commitment to transparency and good governance by displaying evidence of their charity registration on their websites and correspondence.
In order to gain the benefits that ACNC registration provides, charities have a series of ongoing obligations (which are in addition to any other obligations under other laws or to other Commonwealth, state or territory regulators). Failure to comply with one or more of those obligations may result in enforcement actions being taken against a charity such as warnings, directions, the removal of Responsible Persons or, in a worst case scenario, revocation of the charity’s registration and therefore the loss of eligibility to receive tax concessions and other benefits.
Ongoing obligations to the ACNC
In summary, as well as maintaining their not-for-profit status and pursuing their charitable purpose(s), charities have the following ongoing obligations to the ACNC to remain eligible to be registered.
Charities must notify the ACNC of any changes to their legal name, their address for service, their Responsible Persons (those people responsible for directing the charity) or their governing documents. Notification must occur within 28 to 60 days depending on the size of the charity. The ACNC must also be notified if the charity is failing to meet its ongoing obligations in a significant way.
Charities must keep both financial and operational records to explain their financial position and activities. The records must be easy to access and must be made available to the ACNC upon request.
All charities (unless exempt) must submit an Annual Information Statement (AIS) within six months of the end of the relevant charity’s reporting period. The AIS provides an overview of the charity’s financial position and operations. The charity’s size (based on its annual revenue) will determine its exact reporting requirements. The ACNC Charity Register will show if the charity’s reporting is not up-to-date.
All charities (unless exempt) must comply with the ACNC Governance Standards (Standards) to remain registered. The Standards are a set of core, minimum requirements of governance which help promote public trust and confidence in charities. As the Standards are a set of high-level principles (rather than precise rules), it is for the charity in question to determine how it will comply with them. The charity must be able to demonstrate its compliance to the ACNC if requested. In summary, the six Standards are as follows:
How can we help your charity?
We can work with charities who are considering applying for ACNC registration or who may be concerned about whether they are meeting their ongoing ACNC obligations.
Effective Governance (eG) is the governance and risk advisory practice of HopgoodGanim Lawyers. eG works with boards and executive teams across Australia and internationally to help them to perform, achieve compliance and to deliver best practice board, organisational and regulatory governance. eG’s comprehensive services include board and organisational governance reviews, strategic planning and facilitation and professional development.
eG’s leading and senior team of governance and risk advisors offer a wealth of experience in their speciality areas of expertise. eG’s advisors include past CEOs and CFOs, board chairs and directors, organisational behaviour and human resource consultants, academics, researchers and market-supervisors.
