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Governance Standard 1 requires charities to demonstrate that they:

  • were set up as a not-for-profit with a charitable purpose, and
  • run as a not-for-profit and work towards that charitable purpose.

It also requires charities to demonstrate that they can provide information to the public about their charitable purpose.

Purpose of this standard

To be registered with the ACNC, all charities must be not-for-profit and have a charitable purpose.

This standard requires charities to remain not-for-profit and to work towards this purpose, which provides reassurance to the public that the charity has good reasons to be entitled to the tax concessions and other benefits it receives.

Ways to meet this standard

Common steps your charity can take to meet Governance Standard 1 are to:

  • include charitable purpose and not-for-profit clauses in your governing document (such as your charity’s constitution, rules or trust deed)
  • upload the governing document with these clauses in the ACNC Charity Portal, so it appears on the public ACNC Charity Register
  • run your organisation as a charity (by following its purpose and being a not-for-profit), and
  • provide information about your charity's purpose and how it meets it on a website or through social media.

Demonstrating your charity is not-for-profit and has charitable purposes

Charities can meet this part of the standard by including their charitable purpose and a rule requiring them to operate as a not-for-profit in their governing document.

Most registered charities will already have a governing document that includes clauses or rules relating to charitable purpose or not-for-profit nature. The ACNC usually requires this as part of the registration process. Once registered, the governing document will automatically be published on the ACNC Register.

However, having a governing document is just one way of meeting this part of this standard. Your charity does not have to use a formal document, or even something in writing to demonstrate its purposes and not-for-profit character, if this is reasonable for your situation.

For example, a small charity might save a copy of an email of an agreement between members on the charity’s purpose. Or, your charity’s mission statement may clearly outline its charitable purpose.

Operating as a not-for-profit and for its charitable purpose

A charity must run as a not-for-profit and work towards the charitable purpose it was established to achieve in order to meet this part of the standard.

A not-for-profit is an organisation that does not operate for the profit, personal gain or other benefit of particular people. This can include people such as its members, the people who run it (its Responsible People) or their friends or relatives. Charities must be not-for-profit both while they are operating and if they close down.

There are some practical steps you can take to help your charity meet this part of the standard. For example, set up processes that protect and control what happens to your charity’s donations or any profits it makes, so that these are only used for its charitable purpose. This includes having rules about who has access to money, and who decides how it is used.

Making information about your purposes available to the public

A charity can generally meet this standard if a copy of your charity’s governing document contains clauses about its charitable purpose and it appears on the ACNC Register.

There are also other ways to meet this standard, provided these steps are reasonable for your type of charity. For example, you could:

  • explain what your charity does on its website, through social media or an annual report (particularly if it is a larger charity)
  • if your charity does not have a website or social media presence, provide the information on request by phone, email or in writing
  • display your charity’s purpose in writing at its office.

Examples

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