Keep charity records
On this page:
- What are records?
- How to keep records
- Why keep records?
- Record-keeping for other regulators
- Charities have different obligations for record-keeping. It depends on your charity’s size, its complexity, its activities, how it spends or receives money or other assets and whether it has extra obligations from state-based regulators, such as consumer affairs agencies (for incorporated associations).
- ASIC-registered charities (such as companies limited by guarantee) the ACNC obligations replace requirements that used to apply under the Corporations Act.
- The record- keeping obligations below relate only to requirements under the ACNC Act. Charities may have additional record-keeping requirements under other legislation such as legislation relating to health records, privacy, and so on .
- If you are unsure about which financial or operational records your charity should keep, seek professional advice.
Summary of ACNC record-keeping obligations
- must keep certain written financial and operational records
- can keep the records in any format you choose , as long as they are easy to find (including in electronic form)
- can develop its own system or process
- must keep the records for seven years
- must keep records in English, or in a form that can be easily translated to English
- is not required to provide the records to the ACNC unless asked.
What are records?
A record is a piece of information that shows your charity has operated or acted in a particular way, or spent or received money or other assets (made a transaction).
What records to keep for the ACNC
Under the ACNC Act, your charity must keep two types of records:
- financial records, and
- operational records.
- correctly record and explain how your charity spends or receives its money or other assets (transactions)
- correctly record and explain your charity’s financial position and performance, and
- allow for true and fair financial statements to be prepared and audited or reviewed, if required.
Even if your charity does not need to submit financial reports to the ACNC (because it is a small or a basic religious charity), your charity still needs to keep financial records that meet these requirements. The ACNC Act or the ACNC Commissioner could require your charity to prepare financial statements.
The ACNC Act does not define what a financial record is. For guidance on what could be a financial record, see examples of financial records.
These are any other documents about your charity's operations. You must keep operational records that show how your charity:
- is entitled to be registered as a charity and as its subtype
- meets its obligations under ACNC Act, and
- meets its obligations under tax law.
The ACNC Act does not define what an operational record is. For guidance on what could be an operational record, see examples of operational records.
How to keep records
Charities can keep the records in any format that suits, as long as they are:
- in writing
- readily accessible (easy to find), and
- in English, or in a form that can be easily translated to English.
Charities can keep records on paper or on their computer (in electronic form).
Attention - Important information!Tip: To make sure you can provide records if asked, you should back up your computer, and you can also print out a paper record of any important documents. This is because things can go wrong – files can go missing, computers can break or be stolen. When you back your computer up, keep your back-up in a different and secure place to your computer, for example, at a different location.
Keeping paper records
Your charity will have its own systems and processes for keeping paper records. Paper records will include the records you have printed from your computer and other paper records, for example, original receipts and letters you receive in the mail.
Points to remember when keeping paper records
- Organise the paper records into files, boxes, folders or envelopes that allow the records to be found easily
- Separate the different paper records into categories (bank statements, communication, bills, receipts), and
- Separate these records according to your charity’s reporting period (for example, financial year 1 July to 30 June).
Why keep records?
When your charity keeps good records of how it is run, this can help you:
- show it is continuing to be run as a not-for-profit and working towards its charitable purposes (and so should remain eligible to be registered as a charity)
- understand whether your charity is in good financial health
- assess whether the right kinds of decisions are being made (operational and financial)
- communicate about your charity’s activities and finances
- prepare reports to meet your reporting obligations to the ACNC, other government regulators, donors/funders and members (if relevant), and
- otherwise show that your charity meets its obligations under the ACNC Act, tax and other relevant laws.
Helps to meet the governance standards
Keeping records can also help your charity meet the ACNC governance standards, for example, records can show:
- its charitable purpose and not-for-profit nature (governance standard 1)
- it is being accountable to its members (governance standard 2), and
- it is taking reasonable steps to make sure its responsible persons manage financial affairs responsibly, including not operating the charity whilst it is insolvent (governance standard 5).
Record-keeping for other regulators
Your charity may need to report to other government regulators, which may have their own record-keeping requirements. For example, you will need to maintain good business records to help manage your charity’s obligations with the Australian Taxation Office (ATO). If you are following the ACNC record-keeping requirements it is likely that you are meeting most of your obligations to the ATO.
Destruction of records
After seven years (and if your charity has no record-keeping obligations to other regulators), your charity can destroy its records for ACNC purposes. Before you destroy records, check your charity’s records policy and other legal obligations, for example, privacy requirements to make sure you are doing so appropriately.