Our forum is called Governing for Good for a reason. It’s about governing for purpose and the public good, not simply ticking boxes or having a folder full of policies.
Healthy charity governance is really, in my view, founded on two key principles; it’s about acting for your charitable purpose, and also acting for the public benefit.
Now, I know many people will rightly say, of course, it’s for the public benefit because you can’t have a charitable purpose without that. But what we find is sometimes things go wrong when people forget the public benefit part; when that part gets lost in the delivery.
For me, these principles are at the heart of the social licence that charities rely on. And that social licence depends very much on public trust and confidence.
At the ACNC, our key responsibility is to help charities maintain that trust.
Most of our work is not about enforcement though - the pointy end of the toolkit is rarely used, thankfully.
Instead, most of what we do is about education, guidance and regulatory advice to help prevent governance failures before they occur. These failures can be devastating for those who rely on the charity's services, and at the broader level, they can jeopardise the public's willingness to donate or volunteer.
This eye to prevention is reflected in our current regulatory focus areas. For this financial year those focus areas cover two things; governing documents and also working with partners.
We chose these areas because they go to the core of governance for every charity, no matter what sector you’re in, or what size. Whether you’re delivering frontline services, you’re helping with adult literacy, you’re helping with the environment, or you’re supporting people in aged care − these fundamentals really matter.
With your governing document, we urge you to think of this as not just a compliance obligation, but the foundation for your charity’s governance framework. It records your purpose, talks about how decisions are made and creates accountability.
Charities are much better placed to ‘govern for good’ when their governing documents are current, understood and actively used.
Secondly, we have focused on partnerships and collaborative models because what we’ve heard is that partnerships can extend your impact, they can help you bring in expertise when you need it, and they can help you preserve your resources (for example, by sharing back-office arrangements). But for these partnerships to be effective, they need clarity and accountability of decision-making. That’s why we think it’s a ‘good’ governance issue to focus on.
If you combine those two things, the governing document and partnerships, they go to the heart of how charities work in practice.
We know from our 12th edition of the Australian Charities Report published in June, that the sector is under pressure. Many, many charities are under significant financial pressure, and this is happening at a time when you’re also facing rises in demand, and probably an increasingly complex regulatory environment.
So, what do we do as the ACNC knowing that environment? We spend most of our time on education, particularly on practical guidance.
One example of that has been published today [14 August] is the updated Commissioner's Interpretation Statement on community housing.
Why would I get so excited about a piece of guidance?
Governments across Australia are investing in this issue because affordable housing and social housing are a critical social issue for Australia. And charities can play an important part in addressing this issue.
But at the same time, the provision of housing of itself is not a charitable purpose. This creates a live question for charities and advisers about how housing activities fit within charity law.
The updated statement provides contemporary guidance – it will help both new and existing charities, and it covers some of the models that we’re seeing; key worker housing, affordable housing and rent to buy schemes.
There are many people in this room, and more online, who contributed to feedback on the draft statement; and we really appreciate that.
I will call out one piece of feedback though.
The state and territory regulators responsible for the administration of the National Regulatory Framework for Community Housing, described the Statement as “a significant step forward”, noting that “it aligns with the sector's real-world practices and the needs of vulnerable cohorts”, and will support “both charitable integrity and sector best practice”. It’s a rare thing to get that sort of feedback from all states and territories!
More importantly, it demonstrates that our guidance can help charities pursue their purposes confidently when responding to these important social challenges; a privilege for the ACNC.
With this major piece of work done, we’re looking to the next one; over the next year we will focus on our Interpretation Statement on Indigenous charities.
We want to ensure this guidance reflects a contemporary understanding of the circumstances faced by Indigenous-led charities and those that focus on Indigenous issues, including the effects of intergenerational trauma.
But support we give doesn’t always come in the form of a 30-page technical guidance document that has footnotes.
Sometimes the need is highly technical (such as it was for housing), and sometimes the need is for very simply and accessible information.
Earlier this year, I recorded an explainer with SBS about the ACNC’s Charity Register. It was originally produced in English, but it’s now been played in 30 different languages.
Different audience. Different format.
So whether it is a detailed Interpretation Statement on community housing or a simple explainer, the purpose is to help charities pursue their purposes; so they can deliver public benefit and maintain the confidence of the Australian community.
In doing so, we think we help the charity sector not only be well governed, but also be resilient enough to adapt to change while staying true to purpose.
Let me finish where I started, with those two simple mantras: acting for purpose – always keeping that at the forefront – but remembering, with that, is a responsibility to also act for public benefit.
Purpose gives a charity direction. Good governance helps it stay on course to deliver for the public good.
And our role as the national charities regulator is to help ensure Australians can engage confidently with registered charities, knowing they operate with integrity, accountability and transparency.
Sue Woodward AM
ACNC Commissioner