The ACNC recognises that a charity’s usual operations may be affected by COVID-19, as well as the measures being put in place to try and control its spread. This page provides some information about these issues.
Charity meetings and AGMs
The ACNC's Governance Standard 2 requires a charity to be ‘accountable to members’. A common way for charities to do this is through AGMs and other meetings.
The effects of COVID-19 mean that many charities are choosing to hold meetings remotely. But if your charity is unable to hold meetings at all during this time, the ACNC recommends you:
- advise or consult with members on the reasons for postponing any meeting
- document why a meeting did not occur or could not occur online
- use alternative ways to communicate the information that it would have provided at a meeting to members
- schedule a future date for any postponed meetings (even if this has to be amended again later).
If your charity needs to delay or postpone its AGM, it should check requirements with its other regulators:
- Guidance on AGMs from state or territory regulators (for charities that are incorporated associations)
- Guidance on AGMs from the Australian Securities and Investment Commission (ASIC) (for charities that are companies regulated by ASIC)
- Guidance on AGMs from the Office of the Registrar for Indigenous Corporations (ORIC) (for charities regulated by ORIC).
Charity operations and governance
The effects of COVD-19 mean that some or all of your charity's activities may need to be modified or even temporarily halted.
It is important your charity keeps records of changes it makes to its operations and keeps everyone informed of what it is doing, and why.
See our guidance on record-keeping for information on keeping records when working remotely or from home.
Regular communication about your charity's changed activities should be a priority. Some charities may be able to offer their programs online.
Importantly, if your charity's operations do change, it is important they remain consistent with the charity’s charitable purpose. Your charity's purpose is what it was set up to achieve. Your charity can have more than one charitable purpose.
Finances and fundraisers
Each charity needs to consider how COVID-19 affects their finances. These considerations can include:
- Assessing future cash flows and doing a forecast - or adjusting a forecast - in light of current events.
- Speaking to funders about the effects of cancelling or delaying activities that are part of funding agreements.
- If a funder or grantmaker encourages or allows your charity to alter its operations, make sure any changes do not affect your charity’s charitable purposes or its compliance with the Governance Standards or External Conduct Standards.
- Knowing fixed costs and when they will need to be paid. Also, not committing to any more expenditure if possible.
- Reviewing existing liabilities (for example, exploring options with banks or financial institutions, including deferring loan repayments if applicable).
- Considering financial assistance available from governments or relief packages from banks or financial institutions
For the purposes of banking, many charities are often classed as small-medium businesses. This means they may be eligible for support provided to small or medium business. Charities can contact their bank or financial institution to find out more.
Further information on financial reporting and COVID-19
- CPA Australia information on COVID-19 for accountants and financial officers.
- Australian Accounting Standards Board - COVID-19 guidance.
The ACNC understands that some charities may consider drawing on their reserves to stay afloat if income sources change or services need to increase.
Responsible People must consider whether drawing on reserves is the best option, or whether there are other alternatives. And Responsible People should also be aware of any restrictions on the use of reserves, and ensure there are proper records that document any debate or decision to draw on charity reserves.
For a charity that has decided to cancel or postpone a fundraising event due to concerns over COVID-19, there may be questions raised over what to do with any money already committed (for example, through ticket sales or other purchases).
In these situations, it is important that a charity is transparent about what it is going to do:
- Will the money be refunded - either immediately or in time?
- Can the money be refunded - are there any legal issues preventing this happening?
- Will the charity hold the money until the fundraiser is rescheduled?
- Will the charity commit the money towards a future event or effort?
Whatever the charity decides to do, it is important that it documents the decision and communicates clearly with supporters and other stakeholders the reasons for the decision. It should also be clear about how funds will be refunded or used in line with donors' original intent and the charity's charitable purpose.
Charities that continue to fundraise should be mindful of any physical distancing protocols and other measures. Charities may also want to consider alternative ways to raise funds, such as online appeals.
Government support for eligible charities
The Australian Taxation Office (ATO) has information for charities and not-for-profits about ATO-related COVID-19 support. It also has information on additional support during COVID-19 for not-for-profits having difficulties meeting their tax and super obligations.
Changes to ancillary fund guidelines
The Federal Government has amended the ministerial guidelines for public and private ancillary funds. The amendments were to 'provide a credit for funds that make total distributions in financial years 2019-20 and 2020-21 that are at least four percentage points above the minimum required distributions'.
The credit may be used to reduce the minimum distribution by up to one percentage point in 2021-22 and future financial years until the credit is exhausted. The amendments aim to encourage ancillary funds to increase their granting during this time.
COVID-19 pandemic declared a disaster - implications for Australian disaster relief funds
In May 2020 the Federal Government declared the COVID-19 pandemic a disaster for the purpose of establishing Australian disaster relief funds as deductible gift recipients (DGRs), allowing them to receive tax-deductible donations.
Donations to Australian disaster relief funds are tax deductible when made within two years of 18 March 2020. The ATO has more information about disaster relief funds.
State and Territory Governments
State and Territory governments have established COVID-19 stimulus and relief packages for businesses and other organisations - including some charities:
- Australian Capital Territory
- New South Wales
- Northern Territory
- South Australia
- Western Australia
ACNC compliance and Annual Information Statement submission
The ACNC changed its approach to certain breaches of the Governance Standards and the External Conduct Standards that occurred from 25 March until 31 December 2020. This short-term change aimed to allow charities to operate effectively, as well as enhance public trust and confidence in the sector. Read the full explanation of the changes.
Some charities face challenges in submitting their Annual Information Statement on time due to the effects of COVID-19. The ACNC Commissioner has the discretion to defer when charities must submit 'approved forms', including the Annual Information Statement.
The Commissioner will exercise this discretion if it is fair and reasonable - or if there is a genuine need to do so - taking into account a charity’s individual circumstances.
Any request to defer a charity's Annual Information Statement submission date must be in writing and from a charity's authorised person - for example, a primary contact or Responsible Person. For the request to be considered, it must also include:
- the reason for the delay in submission (which must be circumstances beyond the charity’s control), and
- the new Annual Information Statement due date being requested.
Written requests must be sent to firstname.lastname@example.org before the Annual Information Statement is due.
Charities that are seeking deferral of their Annual Information Statement submission and have other obligations to a state or territory regulator should check with that regulator for information about their reporting requirements.
Reporting JobKeeper payments in your charity's Annual Information Statement
If your charity claimed JobKeeper payments, they must be included in determining your charity's size based on its revenue. They should be recorded as revenue from government in the financial information within your charity's Annual Information Statement.
Note: Federal Government allowances such as JobKeeper and Cashflow Boost payments do not constitute grants for the purposes of determining whether a charity is a Basic Religious Charity under s205-35 of the Australian Charities and Not-for-profits Commission Act 2012 (Cth).