The External Conduct Standards are a set of standards that govern how a registered charity must manage its activities and resources outside Australia.
The Standards require charities to take reasonable steps to ensure appropriate standards of behaviour, governance and oversight when undertaking activities or providing funding overseas.
They are intended to promote transparency and provide confidence that resources sent, or services provided, overseas reach legitimate beneficiaries and are used for legitimate charitable purposes. The Standards also seek to protect vulnerable people overseas.
Which charities must comply
Charities that operate outside Australia are required to comply with the External Conduct Standards.
Importantly, ‘operate outside Australia’ is not limited to major programs or projects. A charity is generally considered to operate outside Australia even if its overseas activities are just a minor part of its work or if it only sends a small amount of money overseas. This is true even when such activities are conducted through a third party.
Charities that do not operate outside Australia are not subject to the External Conduct Standards. However, these charities still must comply with the Governance Standards.
Read our detailed guide that explains when the External Conduct Standards apply and when they do not apply.
The External Conduct Standards
There are four External Conduct Standards that cover certain aspects of a charity's overseas operations.
Standard 1: Activities and control of resources (including funds)
This Standard covers the way a charity manages its activities overseas, and how it is required to control the finances and other resources it uses overseas.
Standard 2: Annual review of overseas activities and record-keeping
This Standard covers the requirements for a charity to obtain and keep sufficient records for its overseas activities.
Standard 3: Anti-fraud and anti-corruption
This Standard covers the requirements for a charity to have processes and procedures that work to combat fraud and corruption in its overseas operations.
Standard 4: Protection of vulnerable individuals
This Standard covers the requirement for a charity to protect the vulnerable people that it works with when conducting its overseas operations.
How the ACNC regulates the External Conduct Standards
The ACNC regulates the External Conduct Standards according to our regulatory approach. We expect each charity that is required to comply with the External Conduct Standards takes the time to understand the Standards and how they affect its operations. We also expect that each charity required to comply with the Standards takes steps to ensure it meets them.
The ACNC expects most charities will be meeting the External Conduct Standards, and we focus on charities that have seriously or deliberately breached them - taking action where required.
Charities do not need to submit anything to the ACNC to show they meet the External Conduct Standards but must be able to provide evidence of meeting the Standards if requested.
However, we will ask organisations seeking registration with the ACNC (and charities applying for new charitable subtypes) about the steps they have taken to comply with the External Conduct Standards if they operate overseas.
External Conduct Standards and Governance Standards
The External Conduct Standards apply in addition to the existing ACNC Governance Standards.
The External Conduct Standards operate in a similar way to the Governance Standards - both impose reasonable levels of oversight and standards of governance rather than specific steps for charities to take.
The ECS self-evaluation tool
The ACNC's self-evaluation tool for charities operating overseas aims to help charities assess if they are meeting their obligations, and to identify issues that may prevent them from doing so.
The self-evaluation poses questions and prompts charities to describe both the practical steps they are taking to meet their obligations, and to list the relevant policies or procedures.