What are the standards?
Standard 1: Purposes and not-for-profit nature of a registered entity
Charities must be not-for-profit and work towards their charitable purpose. They must be able to demonstrate this and provide information about their purpose to the public.
Standard 2: Accountability to members
Charities that have members must take reasonable steps to be accountable to their members and provide their members adequate opportunity to raise concerns about how the charity is governed.
Standard 3: Compliance with Australian laws
Charities must not commit a serious offence (such as fraud) under any Australian law or breach a law that may result in a penalty of 60 penalty units (currently $10 200) or more.
Standard 4: Suitability of responsible persons
Charities must check that their responsible persons (such as board or committee members or trustees – called ‘responsible entities’ under the ACNC Act) are not disqualified from managing a corporation under the Corporations Act 2001 (Cth) (Corporations Act) or disqualified from being a responsible person of a registered charity by the ACNC Commissioner. Charities must take reasonable steps to remove any responsible person who does not meet these requirements.
Standard 5: Duties of responsible persons
Charities must take reasonable steps to make sure that responsible persons understand and carry out the duties set out in this standard.
ACNC’s approach to governance standards
The ACNC’s approach to implementing the governance standards is based on two main points:
- minimum standards – these standards set out minimum requirements for governance of your charity. They do not cover all aspects of governance. The ACNC provides tools and resources to promote good governance practices beyond these minimum standards
- principles-based standards – we will generally apply the standards as a set of high-level (general) principles, rather than as precise rules. In other words, your charity can generally choose how to comply, as long as it can demonstrate, should it be required to do so, that this is appropriate taking into account its situation such as:
- reach (local, national or international)
- the people and causes it helps (such as vulnerable people)
- who its members are
- source of funding (public donations or government funding), and
- existing governance systems and processes.
The ACNC will take a flexible approach to enforcement, focussing on achieving our regulatory objectives of promoting public trust and confidence, and supporting a robust and vibrant sector.
Attention - You need to know! Consistent with our regulatory approach and acknowledging that the standards are new, our main task for the first two years will be on providing information and guidance to help charities comply and then monitoring compliance in a phased way.
We will focus on charities that have seriously or deliberately breached the governance standards, for example by diverting money to non-charitable purposes, not disclosing serious conflicts of interest or gross financial negligence.
We will not require every registered charity to send us a general statement or provide us with other evidence of meeting the standards. The ACNC will only act if we have information that indicates that there may be serious risks involved. In this case, we may ask charities to provide us information on how they have met the governance standards.
What do registered charities need to do now?
As these are minimum standards, the ACNC expects many charities will already meet most of them. For example, charities that already comply with obligations under incorporated association legislation or the Corporations Act 2001 will already meet most of the standards.
Attention:You need to know! We have provided high-level guidance on how to meet each standard (see links above) and recommend you read this carefully before taking any action. It is likely to save you time and worry.
Where appropriate, our guidance describes what we think will be the easiest ways (most common steps) for charities to meet the standards. But a small unincorporated volunteer-run charity (such as a self-help support group) may, for example, be able to meet the standard in another way. A larger charity involved in services (such as aged care, child care and programs for vulnerable youth) may be expected to do more for some of the standards. In general, your charity can choose how it wants to meet the standards, provided it can show the ACNC this is reasonable in its situation.
We expect that most charities will not need to spend significant time nor incur any expenses (including on legal or other professional advice) to meet the standards.
When do charities have to comply by?
The ACNC expects all charities (except basic religious charities) to meet the governance standards from 1 July 2013. However, there are two exceptions to this requirement:
- If there is a specific part of your charity’s governing document (such as its constitution, rules or trust deed) that prevents it from meeting a part of the standards, your charity has until 1 July 2017 to make any necessary changes to its governing documents to address this. In the meantime, your charity must comply with the standards as far as possible, without breaching its governing document.
- your charity is an incorporated association and:
- its incorporated associations legislation sets out duties for its responsible persons, and
- your charity (and its responsible persons) comply with such duties,
your charity will be taken to meet governance standard 5 until 1 July 2017.
How do the standards apply to charities applying to register?
When your charity applies to register with the ACNC, you need to make sure that it meets the governance standards. Meeting the standards is also part of your charity's ongoing entitlement to registration. Please read our guidance on meeting each standard (see links for each standard above).
Read the full text of the standards, and about some of the common myths about the standards.