When your charity keeps good records of how it is run, this can help you:
- show it is continuing to be run as a not-for-profit and working towards its charitable purposes (and so should remain eligible to be registered as a charity)
- understand whether your charity is in good financial health
- assess whether the right kinds of decisions are being made (operational and financial)
- communicate about your charity’s activities and finances
- prepare reports to meet your reporting obligations to the ACNC, other government regulators, donors/funders and members (if relevant), and
- otherwise show that your charity meets its obligations under the ACNC Act, tax and other relevant laws.
Helps to meet the governance standards
Keeping records can also help your charity meet the ACNC governance standards, for example, records can show:
- its charitable purpose and not-for-profit nature (governance standard 1)
- it is being accountable to its members (governance standard 2), and
- it is taking reasonable steps to make sure its responsible persons manage financial affairs responsibly, including not operating the charity whilst it is insolvent (governance standard 5).
Record-keeping for other regulators
Your charity may need to report to other government regulators, which may have their own record-keeping requirements. For example, you will need to maintain good business records to help manage your charity’s obligations with the Australian Taxation Office (ATO). If you are following the ACNC record-keeping requirements it is likely that you are meeting most of your obligations to the ATO.