Last week the ACNC was delighted to host a visit from the Ministry of Justice in South Korea. Mr Yang Ho Park, Mr Gyu Jin Park and Ms Hae-Sun Kim from the Office of Legal Counsel, who are tasked with drafting new non-profit legislation, spent time with us.
Following the election of President Moon Jae-in in May this year, we understand that the establishment of a system of national regulation of non-profits is a government policy priority. It is very positive that the ACNC’s work and reputation is being recognised internationally as an example of good practice.
In its establishment phase, the ACNC was supported by a number of other charity regulators including Canada, England and Wales, and New Zealand. It is positive that we are now able to offer some assistance to regional partners too.
I was also fortunate last week to be able to address both the War Widows’ Guild of Australia’s Annual Conference in Canberra and Legacy’s National Conference in Wollongong. Both are important charities providing support to war widows and their children.
Whilst in Wollongong I visited the charity Big Fat Smile, which runs 42 childcare centres right across New South Wales, and also has Australia’s only gallery dedicated exclusively to the artwork of children and young people. I met with the Board and senior team of the charity, visited their impressive facilities and presented them with an ACNC Registered Charity Tick.
I also ran an Ask ACNC information session that was attended by 40 Illawarra charities. It is important to me that the ACNC is not an agency that is desk-based or only visits the major cities.
Talking to charities in regional and remote Australia is vital if we are to have a good understanding of their issues and challenges.
Mergers and collaborations
At all the sessions I have spoken at as acting Commissioner, I have talked about the importance of good governance in the running of charities, and the need for all charities to re-appraise how they are structured and what they are doing.
Each charity faces different challenges, whether it is a declining membership, a changing funding landscape, disruption from new entrants to the market or new technology. A governance structure that was appropriate ten years ago may well not be appropriate today. Businesses that don’t change and adapt often fail to thrive, and charities are no different.
As a matter of course, all boards should ask, at least on an annual basis: Is continuing to run our charity the best way to deliver on our purposes? For many, continuing the charity will be the best option, but not for all. Merging with another charity, or transferring your funds to another organisation with the same or similar purposes, may be the best way to go. The end result should be achieving the best outcomes for the people that your charity was set up to help or cause it was established to advance.
Even if continuing the charity is the best thing to do, you should ask: Moving forward, are our structures right? I was interested to see this week the steps taken by a number of the state Asthma Foundations to merge to establish a new national health charity. Many charities are currently looking at such structural changes, and it is helpful to have a recent example here, where this has been successfully achieved.
I very much see mergers and collaborations as part of a spectrum of activity. Whilst many charities may not merge, all should consider collaborations with others. This can take many forms, such as sharing back office services, sharing accommodation space, joint campaigning on common issues, running joint training, using joint purchasing power or even sharing staff or equipment. Is your board actively identifying other charities in your area with similar purposes that you could collaborate with? If not, why not?
You can find charities in your region with similar charitable purposes by using the advanced search function on the ACNC’s Charity Register. You can search the Charity Register at acnc.gov.au/charityregister.
New Corporate Partnerships factsheet available
Charities often talk to us about wanting to foster partnerships with business. Some do this extremely well and have long standing and highly successful arrangements in place. We do see examples though where charities have entered into arrangements where they are receiving very little benefit in return for ‘giving away’ their brand. Many other organisations are not sure where to start.
We have just published a new factsheet – Charities and Corporate Partnerships – to provide solid advice on how charities can work with businesses and corporates to develop a relationship that helps the charity achieve its goals, as well as deliver tangible benefits for the wider community.
The factsheet looks at:
- why charities should be interested in corporate partnerships
- the types of partnerships available, and why charities should consider a wide variety of partnership options
- researching local businesses or corporates when thinking about a partnership
- the work charities need to do before entering a partnership, as well as how they should approach a prospective corporate partner
- risk management, due diligence and the steps involved in maintaining a healthy partnership.
The factsheet is available on the ACNC website at acnc.gov.au/corporatepartnerships.
Recent compliance action
The ACNC works closely with a range of other federal and state agencies to identify where there are governance failings and serious misconduct and mismanagement in the running of charities. We also welcome concerns being raised by members of the public and from people involved in charities.
Both charities had access to Commonwealth charity tax concessions:
- GST concession
- Income tax exemption
- DGR status
Revocation of charity status is reserved for the most serious of cases, as losing registration as a charity strips an organisation of its entitlement to access generous Commonwealth charity tax concessions.
If you have serious concerns about a particular charity that is registered with the ACNC, then please raise this matter with us at acnc.gov.au/charityconcern.
Preparing for AGMs
It’s a busy time for charities that operate on a financial year, with many holding annual general meetings (AGMs) now.
Charities should check their rules and any legislation that applies to them to find out whether they are required to hold an AGM. Keep in mind that if your charity makes certain changes at its AGM (such as to its legal name, Responsible Persons or governing documents), you must notify the ACNC. You need to do this within 28 days if you are a large or medium sized charity (revenue over $250,000). If you are a small charity then you have 60 days.
Don’t forget that we have a range of resources to help you get prepared at acnc.gov.au/AGM.
New ACNC podcast: Board remuneration
Board remuneration is an issue that strongly divides opinion, with some believing that no board members should be paid as this is contrary to the whole principle of charity; and others believing in professionalising boards and that there is a need for remuneration.
What is clear is that you cannot pay board members for their services unless this is authorised in the governing rules or constitution of the charity. If you do make payments, these need to be reasonable and proportionate to the skills required and work undertaken. The ACNC will want to ensure that a proper process is undertaken to set any board remuneration and that conflicts of interest are properly managed. If payments are outside the reasonable range of decisions we’d expect, not properly authorised or disproportionate, then the ACNC will investigate.
The latest episode of our podcast series, ACNC Charity Chat, features my colleague and the ACNC’s Assistant Commissioner General Counsel Murray Baird, as he and Matthew from our Education team discuss the issue.
The podcast examines the idea of payments to board members, explains where the ACNC stands on board remuneration, and some of the considerations charities should think about when making a decision on whether or not to remunerate board members.
You can also subscribe to ACNC Charity Chat to ensure you are notified of new episodes whenever they are released.
Upcoming webinar – Tuesday 14 November 2017
Last week we hosted a webinar about charities' responsibilities when overseeing fundraising activities, as well as other related issues that charities need to keep in mind.
This webinar was just one in a series of informative webinars our team has hosted recently, containing important information for all registered charities about compliance, registration and meeting your obligations to the ACNC.
If you missed a webinar of interest, or would like to refer back to the information provided, we have made all completed webinars available to view on our website at acnc.gov.au/webinars.
Our next session looks at health promotion charities and Public Benevolent Institutions, and will be held on Tuesday 14 November. You can sign up for the November webinar, and all future webinars, at acnc.gov.au/webinars.
Fundraising Institute Australia establishes Code Authority
The Fundraising Institute Australia (FIA) has announced a new independent authority that will oversee the FIA’s new Code, which it launched in July.
The FIA Code is a voluntary, self-regulatory code of conduct for fundraising in Australia. The seven-member Code Authority will be responsible for compliance monitoring, complaints administration and making recommendations for improvements to self-regulation.
With very best wishes