Charities 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 class of charities called ‘Basic Religious Charities’.
Charities do not need to submit anything to the ACNC to show they meet the Standards, but must have evidence of meeting the Standards that they can provide if requested.
What are the Governance Standards?
The Governance Standards are a set of core, minimum standards that deal with how charities are run (including their processes, activities and relationships) – their governance.
The Standards require charities to remain charitable, operate lawfully, and be run in an accountable and responsible way. They help charities remain trusted by the public and continue to do their charitable work. Because the Governance Standards are a set of high-level principles, not precise rules, your charity must decide how it will comply with them.
Your charity must be able to demonstrate that the steps it has taken to comply are appropriate for it (considering factors such as its size, purpose 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
Charities must be not-for-profit and work towards their charitable purpose. They must be able to demonstrate this and provide information about their purposes to the public.
Standard 2: Accountability to members
Charities that have members must take reasonable steps to be accountable to their members and provide them with adequate opportunity to raise concerns about how the charity is governed.
Standard 3: Compliance with Australian laws
Charities 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
Charities 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
Charities must take reasonable steps to make sure that Responsible Persons are subject to, understand and carry out the duties set out in this Standard.
How the ACNC assesses compliance
The ACNC expects 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.