The ACNC has almost completed the Ask ACNC sessions conducted right across Australia. It has been gratifying to consult with the sector, provide briefings, and hear of the great work being right across the continent. The middle object of the ACNC Act is that we support the sustainability of a robust, vibrant, independent and innovative sector – and we saw much evidence of these qualities. Adelaide The Australian charity sector is resourceful and innovative and we at the ACNC aim to meet the changing needs of the sector, as well as providing guidance on emerging issues.

Over the coming months, we will be publishing a suite of guidance materials on topics affecting the sector. Two of these, Fundraising: people in vulnerable circumstances and a factsheet about the number of charities in Australia, are discussed below.

Supplementary Budget Estimates

Yesterday afternoon Assistant Commissioners David Locke and Murray Baird and I appeared before the Economics Legislation Committee at Supplementary Budget Estimates.

Senators asked a range of questions, including our progress on red tape reduction, the requirements for registration as a charity, and Annual Information Statement submission rates.

There were also a number of questions regarding charities and political advocacy.

I was pleased to have the opportunity to clarify the ACNC’s understanding of the legislation and our work in this space following the July 2016 Federal Election.

In explaining the rights and responsibilities of registered charities, we often use the metaphor that charities need to swim between the flags when it comes to looking at the kind of advice they can give, and the kind of advocacy they can engage in.During the recent Federal Election campaign a number of charities were swimming extremely close to the flags.

During and following the election campaign we received 19 concerns regarding the conduct of 11 registered charities. Five of these matters have progressed to an investigation, with one charity receiving a show case notice (which is the charity’s opportunity to explain why they should retain their charity status).

I encourage charities to operate within the spirit as well as the letter of the law in this regard. Even in instances where the ACNC decides not to take action, charities may well be judged to have transgressed in the court of public opinion, and this can have a detrimental impact on their reputation in the long run.

I encourage all registered charities to familiarise themselves with our guidance on this topic. Charities, elections, and advocacy, is available for download at acnc.gov.au/advocacy.

Street Swags takes action to address ACNC concerns

Registered charity Street Swags Limited has entered into a Voluntary Undertaking with the ACNC to address concerns.

Street Swags have fully cooperated with our investigation, which found a lack of financial controls and conflicts of interest policies.

By entering this Voluntary Undertaking, Street Swags have made a commitment to increased accountability and transparency within the charity.

Read the media release addressing the situation and a copy of the Voluntary Undertaking.

New guidance on fundraising and vulnerable persons

In collaboration with the Fundraising Institute of Australia, we have published guidance to help charities that engage with vulnerable people while fundraising.

The guidance, Fundraising: people in vulnerable circumstances, outlines how charities can recognise people in vulnerable circumstances and provides suggested actions for engaging these people respectfully when fundraising.

It is critical that care is taken when engaging people in vulnerable circumstances – I recommend all charities involved in fundraising take the time to read this new guidance.

The guidance is available at acnc.gov.au/vulnerablepeople.

Are there too many charities?

We sometimes hear concerns that there are too many charities in Australia – in fact, I published a blog post on the Huffington Post Australia website on the topic earlier this year.

There are 54,000 charities in Australia – and while that number may seem high, there is more to the discussion than just sheer numbers.

For example, Australia’s registered charities include many organisation that people may not think of as charities: universities, aged care centres, child care centres, surf life-saving clubs, non-government schools, and religious institutions, to name a few.

We have released guidance that explains the many factors that contribute to the ‘too many charities’ discussion, such as the diversity of the sector, and the impacts of different areas of charity including essential services, religion, health, education and human rights – in the hope of addressing this ongoing question.

The ACNC does not encourage growth at any cost. We encourages applicants for registration for charitable status to embed their activities within an existing charity where the purposes are very similar. Like other Common Law countries, roughly the same number who register as charities each year in Australia, voluntarily de-register.

We also encourage charities to ensure they operate efficiently to maximise the benefit of donated, invested and granted dollars. It is pleasing to read the evidence in the 2016 AICD Governance and Performance Study of active collaboration with other NFPs for advocacy and service delivery – 43% subcontract some services to other NFPs, 39% have agreements to refer or service clients, 26% share resources and 15% share back office functions. These initiatives as well as mergers and acquisitions ensure charities are operating efficiently and effectively.

See the full factsheet at acnc.gov.au/toomanycharities.

Penalty notices for non-compliant charities

Regular readers of this column will recall that in my 17 August column I discussed the ACNC’s decision to issue penalty notice final warnings to charities that have failed to lodge outstanding Annual Information Statements.

I’m disappointed to say that we have issued a number of penalty notices to charities for failing to lodge outstanding Annual Information Statements recently. This is part of our commitment to being fair, yet firm, with charities who fail to meet their obligations.

This work is underpinned by the ACNC’s objective to maintain, protect and enhance public trust and confidence in the sector through increased accountability and transparency.

Over the last two weeks, we issued penalty notices to 40 large charities with annual revenue of $1 million or more, and combined assets of over $70,000,000.

These charities have failed to submit their 2015 Annual Information Statements – which are now more than 8 months overdue.

They have been given multiple reminders (including a final warning letter), but have not done so. This lack of transparency can damage the reputation of the sector, tarnishing the hard fought trust and confidence that every compliant charity has helped build.

Charities who have received penalty notices may be required to pay a penalty of up to $4,500.

More information about penalties can be found at acnc.gov.au/penalties.

Changes to reportable fringe benefits for employees

From 1 January 2017, there will be changes to the way fringe benefits are calculated for family assistance and youth income support payments.

However, employees of registered public benevolent institutions and health promotion charities may be exempt from these changes.

If you are providing your employees with fringe benefits, I suggest you encourage them to find out more about how any changes may affect them at humanservices.gov.au/FamilyIncomeEstimate

Good wishes
Susan Pascoe AM

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