A charity must meet the ACNC's Governance Standards to be registered and remain registered with the ACNC. The Governance Standards do not apply to a limited category of charities called ‘Basic Religious Charities’.
A charity does not need to submit anything to the ACNC to show that it meets the Governance Standards. However, it must be able to provide evidence of it meeting the Standards if requested.
External Conduct Standards in addition to the Governance Standards.A charity that conducts activities overseas - including sending funds overseas from Australia - must comply with the
What are the Governance Standards?
The Governance Standards are a set of core, minimum standards that deal with how a charity is run (including its processes, activities and relationships) – its governance.
The Standards require a charity to remain charitable, operate lawfully, and be run in an accountable and responsible way. They help maintain public trust in charities and help charities continue to do their charitable work.
Because the Governance Standards are a set of high-level principles, not precise rules, a charity must decide how it will comply with them.
A charity must be able to demonstrate that the steps it has taken to comply with the Governance Standards are appropriate (considering factors such as its size, purposes and activities). For example, a larger charity or one with vulnerable beneficiaries may need to take extra steps to comply with the Standards.
What the Governance Standards require
Standard 1: Purposes and not-for-profit nature
A charity must be not-for-profit and work towards its charitable purpose. It must be able to demonstrate this and provide information about its purposes to the public.
Standard 2: Accountability to members
A charity that has members must take reasonable steps to be accountable to its members and provide them with adequate opportunity to raise concerns about how the charity is governed.
Standard 3: Compliance with Australian laws
A charity must not commit a serious offence (such as fraud) under any Australian law or breach a law that may result in a penalty of 60 penalty units (equivalent to $12,600 as at December 2018) or more.
Standard 4: Suitability of Responsible Persons
A charity must take reasonable steps to:
- be satisfied that its Responsible Persons (such as board or committee members or trustees) are not disqualified from managing a corporation under the Corporations Act 2001 (Cth) or disqualified from being a Responsible Person of a registered charity by the ACNC Commissioner, and
- remove any Responsible Person who does not meet these requirements.
Standard 5: Duties of Responsible Persons
A charity must take reasonable steps to make sure that its Responsible Persons are subject to, understand, and carry out the duties set out in Governance Standard 5.
Standard 6: Maintaining and enhancing public trust and confidence in the Australian not-for-profit sector
A charity must take reasonable steps to become a participating non-government institution if the charity is, or is likely to be, identified as being involved in the abuse of a person either:
in an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth) (Redress Act), or
in information given in response to a request from the National Redress Scheme Operator (Secretary of the Department of Social Services) under section 24 or 25 of the Redress Act.
How the ACNC assesses compliance
Compliance with the Governance Standards is a condition of registration as a charity. Failure to comply with one or more of the Governance Standards may result in:
- the use of the Commissioner’s enforcement powers, including warnings or directions being issued to the charity
- revocation of charity registration, resulting in the charity losing access to certain government funding, exemptions, concessions and benefits.
We expect most charities will be meeting the Governance Standards and we focus on charities that have seriously or deliberately breached the Governance Standards by (for example):
- diverting money to non-charitable purposes
- not disclosing serious conflicts of interest, or
- being grossly negligent with their finances.
We will act, according to our regulatory approach, if we have information that indicates that there may be serious risks involved.
The ACNC's self-evaluation tool
The ACNC's self-evaluation tool 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.