Checklist: protecting your charity against terrorism financing

Meet governance standard 1: purposes and not-for-profit nature

Summary: charities must be not-for-profit and work towards their charitable purpose. They must be able to demonstrate this and provide information about their purposes to the public.

Does your charity take steps to make sure that its activities overseas agree with its purpose and its character as a not-for-profit?

Does your charity do its due diligence to know its partners who are carrying out its activities or supporting it with fund and asset transfers?

Governance standard 1 requires a charity’s funds to be used to pursue its purposes and the charity to maintain its character as a not-for-profit. Charities must meet this standard to remain entitled to be registered as a charity.

Where funds are being transferred overseas or through other agents in Australia, it can be easy for charities to lose sight of exactly how these funds are being used.  Monitoring and evaluating the projects and activities that your charity is sending its funds to is essential. This allows you to check that the charity’s funds are used for the right purposes.

Charities often work with agents, partners, contractors and other employees. There is no substitute for knowing these other people thoroughly and satisfying yourself that they do not support terrorism and the funds sent are going to further your charity’s charitable purpose. Ask for details and cross-check information from everyone your charity works with – this is part of the due diligence you must undertake.

Questions to ask your charity

  • Does your charity maintain reasonable internal control procedures (including processes for recording transactions and delegations of decision making) that reduce risk?
  • Does your charity monitor and evaluate its activities to make sure they were carried out as intended?
  • Does your charity know who has ultimate control over the project that your charity’s money and resources are going towards, and what the money and resources are used for, including after the particular project is finished?
  • Does your charity know who uses its facilities and for what purpose – for example, your office or meeting space, name, bank account, credit cards, website, computer system, telephone or fax? Does your charity have clear written agreements with agents/contractors/other partners, in Australia and abroad, covering what activities will be undertaken and how they will be monitored and accounted for? Do you check that the agreements are being followed? 
  • Does your charity review the capacity and capability of partners to manage, deliver and track funds and resources?
  • Does your charity know who else might be supporting the person or cause that it is endorsing in public statements, or is using the charity’s name?

Steps you can take