Registered charities that operate overseas have to comply with the External Conduct Standards.
The External Conduct Standards apply to all registered charities, including Basic Religious Charities, when they are:
- operating outside Australia, or
- working with a third party operating outside Australia.
The standards may apply to a charity even if it only undertakes minor activities, or sends only a small amount of money or resources outside Australia.
Operating outside Australia
For the External Conduct Standards, ‘operating outside Australia’ generally includes undertaking activities overseas or funding activities overseas, no matter how small.
A charity does not have to be directly involved in an activity overseas to be considered operating outside Australia. It would generally be considered to be operating outside Australia even if it works with another organisation or individual to undertake overseas activities on its behalf.
Activities that may be considered operating outside Australia include:
- sending money overseas
- sending resources overseas
- sending staff, volunteers, members or beneficiaries overseas
- conducting activities or working overseas
- buying goods and services from overseas suppliers (including online purchases)
- working with individuals or organisations located overseas.
It is important to note that the standards also apply to activities conducted in Australia if those activities are closely related to matters that are outside of Australia. This may include, for example, managing an overseas project from Australia.
However, if a charity's activities overseas are directly related to a purpose intended to provide a benefit to people in Australia, and those activities are just an incidental part of its operations in Australia, the External Conduct Standards may not apply.
Funding work overseas
A church is registered as a charity with ACNC and conducts pastoral care activities for a community in Sydney. It also takes up a collection to sponsor missionary work overseas and sends the funds directly to the overseas missionary. The overseas missionary is not a charity registered with the ACNC.
Tick icon The charity must comply with the External Conduct Standards for the sponsorship of the missionary work.
Sending donations to an organisation overseas
A charity in Adelaide operates a homeless shelter and soup kitchen. It also collects donations in Australia to send to an overseas organisation set up to provide aid to survivors of natural disasters outside Australia. The overseas organisation is not a charity registered with the ACNC.
Tick icon The charity must comply with the External Conduct Standards for the money sent overseas. The standards apply even if the amounts are small and the aid is not the charity's main activity.
Conducting activities overseas
A charity in Darwin provides water systems for remote communities in India. It sends volunteers to India to construct these water systems and the volunteers also train locals to be able to maintain the systems themselves.
Tick icon The charity must comply with the External Conduct Standards for the organisation's water system projects and training.
Managing overseas projects from Australia
An Australian charity wants to improve literacy in countries overseas. From Australia, it sources foreign language books and organises their distribution to countries overseas. In some cases, the charity sends funds directly to an overseas school so it can purchase books.
Tick icon The charity must comply with the External Conduct Standards for all aspects of the charity’s activities overseas and for the activities conducted in Australia that are closely related to the supply of the books and funds overseas (sourcing the books, arranging distribution, managing funds sent from Australia).
Conducting activities online for people overseas
A charity in Townsville has a purpose of providing online courses to people who want to learn how to speak English. It prepares all the content for its online courses from its offices in Townsville, and all the educational support staff work from these offices. The students who take the courses are both in Australia and overseas. They can complete their study online wherever they choose.
Tick icon The charity must comply with the External Conduct Standards for the provision of courses to students who are outside Australia.
Working both in Australia and overseas
A charity based in Brisbane is set up to help the homeless in Australia and in some countries overseas. It has programs and projects doing similar work both locally and in other countries.
Tick icon The charity must comply with the External Conduct Standards for its activities helping the homeless who are overseas, including activities in Australia that relate to the work overseas.
Cross icon The charity does not have to comply with the External Conduct Standards for the activities that are solely related to the work in Australia.
Sending Australia-based beneficiaries overseas
An Australian charity helps people in Australia suffering from a particular type of cancer. The treatment it provides involves sending a significant proportion of its beneficiaries to an overseas clinic for a substantial part of their treatment.
Tick icon The charity must comply with the External Conduct Standards for its overseas activities.
Note: The External Conduct Standards do not apply to overseas activities that are just incidental to an Australian purpose. This is explained in more detail in the section 'When the External Conduct Standards do not apply'.
Sending other people overseas
A Melbourne orchestra is a registered charity, and it occasionally organises to tour South America as part of a cultural exchange program to promote Australian music overseas.
Tick icon The charity must comply with the External Conduct Standards for the tours outside Australia.
Although the External Conduct Standards apply to most activities outside Australia – even activities managed remotely through a third party – there are exceptions.
It is important to remember that although the External Conduct Standards may not apply to these exceptions, there is still an obligation to comply with the ACNC Governance Standards.
A charity will not be considered to operate overseas if:
- its activity overseas is directly related to its purposes in Australia, and
- the activity is incidental to its operations in Australia.
In this context, 'incidental' means something that is a minor part of a charity's work benefitting people in Australia. This means that if a charity happens to do something overseas or send money overseas as an incidental part of a purpose to benefit people in Australia, this activity may not be subject to the External Conduct Standards.
Sending Australia-based beneficiaries overseas
An Australian charity helps people suffering from cancer in Australia. The treatment for almost all of its patients occurs solely in Australia. Occasionally, however, the charity helps a small number of patients travel overseas for a small part of their treatment.
The treatment overseas is directly related to the charity's purposes in Australia because it benefits people in Australia. It is also considered incidental to the charity's purposes in Australia because only a few patients receive the treatment and it is in addition to other treatment they receive in Australia.
Cross icon The charity does not need to comply with the External Conduct Standards for sending its patients overseas for treatment.
Sending Australia-based staff to a conference overseas
A university in Australia is a registered charity with the purpose of advancing education. It regularly sends its academic staff to overseas conferences. Staff attend the conferences so they can keep up to date with the latest technology and ideas related to the subjects that they teach, and so they can share these developments with their students.
Having staff attend a conference overseas is directly related to the university's purpose in Australia because it benefits students of the university. Also, sending staff outside Australia for a conference is a minor activity and considered incidental to the university's teaching and research activities in Australia.
Cross icon The charity does not need to comply with the External Conduct Standards for sending its staff outside Australia to conferences.
Obtaining goods from outside Australia for a purpose in Australia
An Australian charity provides remote rural communities in Australia with sustainable irrigation systems. The charity buys a small amount of the irrigation system supplies it uses for these Australian projects from a company based in South Africa.
The irrigation supplies are being used to benefit people in Australia. Also, purchasing the irrigation system supplies is only a minor part of the charity's overall operations in Australia, so it is considered incidental to its operations in Australia.
Cross icon This charity does not need to comply with the External Conduct Standards for its purchase of the irrigation system supplies from the company in South Africa.
Working with third parties
A third party is an organisation or individual that formally or informally collaborates with a charity to advance the charity's purposes.
It includes organisations with which the charity has some form of membership, association or alliance as well as other types of arrangements (including any agreement, promise or undertaking – express or implied – and whether or not legally enforceable).
Working with a foreign organisation
An Australian charity provides improved sanitation to overseas rural communities. It has a partnership with a foreign charity not registered in Australia to help with sourcing local materials and labour.
Tick icon The Australian charity must comply with the External Conduct Standards for its own activities overseas, as well as those of the foreign charity that relate to the projects they work on together.
Working with multiple foreign organisations
An Australian charity works with a charity overseas that is not registered with the ACNC. The Australian charity provides funds to help the overseas charity purchase and supply food to villages experiencing drought and other disasters.
The overseas charity then works with other organisations overseas that aren't registered in Australia to help it distribute the supplies.
Tick icon The Australian charity must comply with the External Conduct Standards for its own activities overseas, as well as those of its overseas partner charity and the other organisations the partner charity works with on this project.
Working with a related party
An Australian charity raises money to help alleviate hunger in locations around the world. It gives all the funds it raises to a parent charity in the United States. The parent charity then disburses the funds to various causes around the world in line with its mission.
Tick icon The Australian charity must comply with the External Conduct Standards for the transfer of funds to its parent organisation overseas, as well as the parent organisation's distribution of those funds.
Working with third parties whose work is overseen by another responsible body
A church in Australia is registered as a charity with the purpose of advancing religion throughout the world. It transfers funds to the bank accounts of two ministers based in Thailand to cover their living costs while they carry out their activities to advance religion.
The church in Australia does not control how the ministers carry out their activities in Thailand – the ministers and their activities are overseen by a church governing body in Thailand.
Tick icon The Australian church must comply with the External Conduct Standards for the transfer of funds to the ministers, as well as the ministers' use of those funds.
There are two circumstances in which the External Conduct Standards do not apply to a charity's work with a third party:
- the third party is a charity registered with the ACNC
- the collaboration with a third party is not directly related to the charity's purpose.
If the third party is also a registered charity with the ACNC, it has its own obligation to comply with the External Conduct Standards.
For the External Conduct Standards to apply to a charity's collaboration with a third party, the collaboration must directly advance the charity's purpose. If the third party's activities in the collaboration only support the charity's purpose in an indirect way, the charity does not need to comply with the External Conduct Standards for the collaboration.
Third party registered with the ACNC
An Australian-based charity is registered with the ACNC and sends money overseas to another ACNC-registered charity that works with local communities in Cambodia to provide school children with books and healthy lunches.
Because the charity that works in Cambodia is also a charity registered with the ACNC, it has its own obligation to comply with the standards for its operations outside Australia.
Tick icon The Australian-based charity must comply with the External Conduct Standards for the management of the money it sends overseas. The charity that works in Cambodia must comply with the External Conduct Standards for its activities overseas.
Cross icon The Australian-based charity does not need to comply with the External Conduct Standards for the overseas activities undertaken by the charity that works in Cambodia.
Collaboration not directly related to the charity's purpose
A charity based in Australia provides educational support in remote communities overseas. The charity separately works with a company located in China that provides IT support for its online financial management and reporting systems.
The IT support from the Chinese company does not extend to the charity's educational support activities. The Chinese company providing IT support is not considered to be collaborating with the charity in a way directly related to the charity's purpose.
Cross icon The charity does not need to comply with the External Conduct Standards for the activities of the Chinese company providing IT support.