Commissioner's Policy Statement

This Commissioner’s Policy Statement explains how the ACNC will interpret and administer the regulatory powers given to the Commissioner by the ACNC Act in circumstances where the ACNC becomes aware of an internal dispute within a registered charity.

This policy also clarifies the obligations charities continue to have with the ACNC when they are experiencing an internal dispute.

Principle 1: Minimal interference with charity operations
Principle 2: Obligations of registered charities continue during disputes
Principle 3: ACNC to provide appropriate referrals to dispute resolution services where possible
Principle 4: ACNC to take appropriate and proportionate action where necessary

Definition of internal dispute

  1. In general, internal disputes are disagreements between groups or individuals within a charity, such as a dispute between board members, or between members and the board. 

  1. For example, an internal dispute could involve:

  • Disagreements about a specific policy or decision of the charity

  • Disagreements about the appointment or removal of a committee member

  • Dissatisfaction about internal processes and procedures. 

This is not an exhaustive list of what constitutes an internal dispute and there may be other examples of an internal dispute.   

  1. An internal dispute is distinct from a complaint against a charity. Refer to Commissioner’s Policy Statement: on Complaints about charities for further information on how the ACNC manages these types of concerns.  

Context

  1. Concerns about internal disputes within a charity can be raised with the ACNC by the public, volunteers, responsible persons of registered charities (also known board members) or any other member of the charity. We recognise that staff, board members and volunteers of charities are often best placed to identify issues occurring within a charity.  
  1. Despite any internal disputes, there is still an expectation that a charity continues to meet its obligations under the ACNC Act, governance standards and external conduct standards (for charities that operate outside Australia).
  1. In some instances, an internal dispute raised with the ACNC relates solely to a difference of opinion between members of a charity. These kinds of concerns do not relate to a breach of the ACNC Act, governance standards or external conduct standards and do not immediately raise a concern about the charity’s ability to comply with its obligations to the ACNC. If there are no compliance concerns, the internal dispute will not be within the ACNC’s jurisdiction to investigate.  
  1. Internal disputes may cause a charity to breach, or be at risk of breaching, the ACNC Act, governance standards or external conduct standards, especially if disputes are left unresolved. For example, if a charity cannot resolve its internal dispute about who the responsible persons are, they may not meet reporting requirements when they arise as it will be unclear who has responsibility.
  1. If the internal dispute results in a breach, or potential breach, of the ACNC Act, governance standards or external conduct standards, the charity may be investigated by the ACNC. Refer to the Commissioner’s Policy Statement: Compliance and enforcement for how the ACNC manages cases of non-compliance by charities.  
  1. The ACNC has powers under Part 4-1 of the ACNC Act to investigate a charity and require it to give information where we have concerns that it may no longer meet the requirements of certain legislative provisions or information given in compliance or purported compliance with certain legislative provisions may be incorrect.
  1. In accordance with the ACNC Regulatory Approach Statement, each instance of a charity failing to meet its obligations will be assessed on the circumstances of the matter, including the action that the ACNC will take (if any).

Principle 1: Minimal interference with charity operations

  1. One of the ACNC Act’s objects is to support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector.  
  1. Consistent with this statutory object and ACNC Regulatory Approach Statement, we respect the autonomy of charities and their ability to determine their own goals, strategies and how best to fulfil them. It is the role of each charity to manage, administer and accept responsibility for its own governance.  
  1. With this in mind, the ACNC will refrain from taking an active role in mediating or resolving a charity’s internal dispute. This is to ensure that the ACNC does not impinge on the independence of charities.
  1. In addition, the ACNC does not have the legislative authority to investigate concerns that are solely about internal disputes within a charity where there is no immediate compliance issue relating to a breach of the ACNC Act, governance standards or external conduct standards.  
  1. Examples of internal disputes which may not be within the ACNC’s jurisdiction include, but are not limited to:  
  • disagreements about how charity money is best spent, as distinct from concerns about misappropriation of charity money or fraud; or
  • disputes over the outcomes of an internal election process that has been carried out according to the relevant protocols; or
  • former responsible persons withholding information from current responsible persons.
  1. There might be times where disputes occur between those involved in running a registered charity. This is not necessarily a sign of poor governance or compliance issues. Where possible, charities should comply with any conflict resolution clause contained within the charity’s governing rules to resolve the dispute. If this does not resolve the dispute, charities should consider engaging a dispute resolution service in a timely manner. Many state and territory governments provide a free dispute resolution service.

Principle 2: Obligations of registered charities continue during disputes

  1. A charity will continue to have responsibilities to meet its obligations to the ACNC during an internal dispute.  
  1. This means, for example, that charities are still required to submit an Annual Information Statement by the due date, even if there is a dispute within the charity about who is responsible for reporting.  
  1. Registered charities also have a duty under section 65-5 of the ACNC Act to notify the ACNC of any changes to responsible persons. It is important for the ACNC to have details about a charity’s current responsible persons to ensure we are communicating to the appropriate representatives, as well as publishing accurate public information on the ACNC Register.  
  1. Sometimes, an internal dispute between responsible persons might give the ACNC cause to question whether charity information on the ACNC Register is accurate. For example, Board Member A might contact the ACNC claiming that Board Member B no longer represents the charity, and Board Member B may contact the ACNC to dispute this. This creates uncertainty over who the ACNC can communicate with, and also means that the information on the ACNC Register might be misleading or incorrect.  
  1. In instances where the ACNC is aware of an internal dispute that raises questions around the accuracy of information on the ACNC Register, the ACNC may decide to temporarily withhold the charity’s details from the ACNC Register to avoid misinforming the public (Section 40-10(2)(b) of the ACNC Act) (see the Commissioner’s Policy Statement: Withholding or removing information from the ACNC Register).  
  1. Access to the Charity Portal may also be withheld if the ACNC deems it appropriate to protect the charity’s record and to avoid publishing misleading or inaccurate information on the ACNC Register.  
  1. It is important to note that the ACNC will only take these steps to fulfil its statutory role to maintain the integrity of the ACNC Register, and this does not represent the ACNC favouring the claims of one group or individual over the other.
  1. If the ACNC deems it appropriate to withhold information from the ACNC Register or access to the Charity Portal due to an internal dispute, the ACNC will issue a letter explaining our concerns to all parties involved in the dispute and what actions a charity could take to restore access.  
  1. In order for the ACNC to restore the charity’s details on the ACNC Register and/or access to the Charity Portal, the ACNC will need to be confident that the internal dispute has been resolved. Charities are responsible for informing and providing evidence to the ACNC of the resolution.  
  1. Depending on the circumstances, the charity could demonstrate that its internal dispute has been resolved by showing the ACNC:
  • the signature of all parties agreeing with the content of the notification
  • a relevant court or tribunal decision
  • a statement from ASIC or the state/territory regulator
  • a letter from a dispute resolution centre detailing the outcome of its intervention.  

This is not an exhaustive list and only illustrates examples of evidence that may be used to demonstrate a dispute has been resolved.  

  1. Decisions to withhold information from the ACNC Register or restrict access to the Charity Portal may not be reviewed under the Review and Appeals provisions in Part 7-2 of the ACNC Act. A charity may seek judicial review of a decision to withhold information on administrative law grounds

Principle 3: ACNC to provide appropriate referrals to dispute resolution services where possible

  1. While an internal dispute may not immediately lead to a breach of the ACNC Act, governance standards or external conduct standards, we recognise that unresolved issues can significantly increase the risk of a breach at a later date. To minimise this risk, the ACNC will provide contact details of relevant dispute settlement bodies where possible and appropriate.
  1.  Charities should strongly consider seeking these services independently so that the internal dispute is resolved in a timely manner.  

Principle 4: ACNC to take appropriate and proportionate action where necessary

  1. Where the ACNC becomes aware of circumstances that indicate an internal dispute within a charity has resulted in a breach of the ACNC Act, the governance standards or external conduct standards, the charity will be referred to ACNC’s Compliance Directorate for review.  
  1. For example, a lack of co-operation between responsible persons might mean that the charity is no longer able to work towards its charitable purpose, or that charity members are no longer able to hold the board to account.   
  1. Compliance concerns that arise from an internal dispute will be managed according to the ACNC’s Commissioner’s Policy Statement: Compliance and enforcement. This means that in all instances where compliance issues are identified, the ACNC’s response will be proportionate and risk-based.  
  1. Depending on the circumstances, the ACNC has a range of options to address non-compliance. This could include providing guidance or exercising formal powers to issue warnings, give a direction, suspend or remove one or more responsible persons, issue administrative penalties (or apply the court to seek civil or criminal penalties), or revoke a charity’s registration.  
  1. Further information on ACNC’s approach to compliance is described within our ACNC Regulatory Approach Statement and the Commissioner’s Policy Statement: Compliance and enforcement.

References

ACNC Policy Framework
Australian Charities and Not-for-profits Act 2012 (Cth) Part 3-1, Part 4-1
Commissioner’s Policy Statement: Complaints about charities
Commissioner’s Policy Statement: Compliance and enforcement
ACNC Regulatory Approach Statement
Commissioner’s Policy Statement 2012/05: Withholding or Removing Information from the ACNC Register

Version history

VersionDate of effectBrief summary of change
Version 1 - Initial policy29/11/2017Initial policy endorsed by the Commissioner on 29/11/2017
Version 2 - Amendment09/07/2019Updated policy to reflect current practice. Removed obsolete references and updated links.