Welcome to the Winter issue of the ACNC Quarterly.

ACNC Quarterly is your source of information about the charity sector, the ACNC, and tools to help your charity meet its obligations.

    From the Commissioner

    Welcome to the winter edition of the ACNC Quarterly newsletter. The cooler weather has brought some positive developments for charities in terms of red tape reduction.

    I am very pleased to note recent announcements by both the South Australian and Tasmanian State Governments that will significantly reduce red tape for registered charities.

    These changes will make a real impact for registered charities in those states. These charities will now be exempt from having to report to state regulators on certain matters where they meet ACNC reporting requirements. More information is available on page 3.

    My congratulations to all involved at state and Commonwealth level, and my thanks to the charities and sector stakeholders that have provided continuous advice on red tape reduction.

    The ACNC remains firmly committed to meaningful red tape reduction and I hope to have further announcements for you in future editions of ACNC Quarterly.

    Complaints policy for charities

    Recently the ACNC has seen an increase in compliance action, with a number of organisations losing their charity status. We continue to receive approximately 70 concerns about charities every month, many relating to financial mismanagement, conflicts of interest and charities failing to fulfil their charitable purposes.

    To help charities to avoid these issues we have published a range of guidance materials, including Governance for Good, My Charity and the ACNC, Managing Charity Money, and Charities, Elections and Advocacy.

    Many of the concerns that we receive relate to disputes within charities or concerns about a charity’s service. Unless the concern relates to a potential breach of the ACNC Act or indicates wrongdoing by the charity, we are often unable to investigate the matter. To help resolve concerns quickly and effectively, we always encourage members of the public to raise the matter with the charity directly in the first instance.

    We expect all charities to have a process for handling complaints. With larger charities there should be a written policy. This becomes particularly important where a charity is providing services to members of the public or is working with children and vulnerable adults. A complaints handling policy should help charities to record and manage issues in a timely, transparent and appropriate manner. We are currently working on new guidance to assist charities to create their own complaints handling policy, if they do not already have one in place.

    A charity’s complaints handling policy should set out how the charity will respond to a complaint, how they will investigate or review it, what the complainant can expect from the charity, and what the complainant can do if they are not satisfied with the charity’s response. This will make it easier to resolve complaints from members, donors, beneficiaries and the public. Board members should as part of their governance responsibilities get reports on the nature and handling of complaints made against their charity.

    As part of our compliance approach, we ask charities to demonstrate to us how they manage and respond to complaints raised by donors, beneficiaries or the public.

    New Advisory Board

    I am pleased to introduce to you the new ACNC Advisory Board, which is chaired by Mr Tony Stuart. Tony brings to the role a wealth experience in both the private and not-for-profit sectors, and is also a member of the Prime Minister’s Community Business Partnership.

    In early May 2016, the then Treasurer, the Hon Scott Morrison MP, announced the membership of the new board. The new 10-person board includes three members from the inaugural advisory board and the existing ex-officio members.

    ACNC Advisory Board members:

    • Mr Tony Stuart – Chair (new member/Chair – 3 year term)
    • Ms Fiona McLeay – Deputy Chair (continuing member/Deputy Chair – 18 month term)
    • Professor Myles McGregor-Lowndes (continuing member – 18 month term)
    • Ms Gina Anderson (continuing member – 18 month term)
    • Professor David Gilchrist (new member – 3 year term)
    • Mr Martin Laverty (new member – 3 year term)
    • Dini Soulio (continuing ex-officio member representing South Australia)
    • Dale Webster (continuing ex-officio member representing Tasmania)
    • Cindy Bravos (continuing ex-officio member representing Northern Territory)
    • Linda Mallet (continuing ex-officio member representing New South Wales)

    I also take this opportunity to thank those who served on the Advisory Board during the establishment phase of the ACNC.

    The first meeting of the new board will be in held in July 2016 in Melbourne. Following the meeting a communiqué will be published at acnc.gov.au/advisoryboard.

    I look forward to working with the new Advisory Board Chair and members to achieve the Objects of the ACNC Act.

    Good wishes.

    Susan Pascoe AM signature

    ACNC Commissioner

    From August, the ACNC will be visiting over 20 regional and metropolitan locations in Australia to talk to charities. The Ask ACNC sessions will cover our work, issues affecting the sector and basic financial training. The sessions are interactive and free to attend.

    See acnc.gov.au/askacnc for details about exact locations and times.

    Poor financial management is the main reason why charities have their registration revoked by the ACNC.

    This year ACNC compliance has identified a number of charities that have failed to keep adequate financial records and have a lack of control over the spending of their charitable funds.

    The ACNC works collaboratively with charities to address these concerns. Our preference is to conduct compliance activities that guide, educate and support charities to better understand and comply with their legal and regulatory obligations. However, we will undertake enforcement activities and act firmly (including revoking registration) in cases of serious financial mismanagement, persistent non-compliance, or if there is a serious or deliberate breach of the ACNC Act.

    Registered charities need to be able to demonstrate that they apply sound financial management and controls to ensure their charitable funds are used appropriately. It is the responsibility of those governing a charity is to make sure that the charity has the resources it needs to work to achieve its charitable purpose.

    The governing body (such as a board or committee of management) must gather the resources (such as funds) for a charity to undertake its work, as well as ensure that these resources are protected from abuse and used in an efficient, lawful and transparent way.

    There is a wealth of financial management guides, tools and training available for people working in not-for-profit organisations. These resources are usually free of charge and they can make a real difference in an individual’s confidence and understanding of financial matters. To access these resources visit acnc.gov.au/money.

    Ensure your charity retains its registration:

    Step 1: Understand your charity’s obligations to the ACNC

    Ongoing obligations include pursuing the charity’s charitable purpose, notifying the ACNC of changes and completing the Annual Information Statement every year.acnc.gov.au/ongoingobligations

    Step 2: Keep records

    Charity financial records must explain how your charity spends and receives its money, as well as record the charity’s financial position and performance.acnc.gov.au/recordkeeping

    Step 3: Apply 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.acnc.gov.au/governancestandards

    Step 4: Improve your financial management skills

    Do some training or browse the free resources available from acnc.gov.au/money

    Charity fundraising is a hot topic frequently reported in the media and raised by members of the public. The ACNC is often approached with questions about how charities can raise and spend their funds.

    Although the ACNC does not regulate fundraising activities (that is done by state and territory governments), we know that fundraising is crucial to the work of many charities.

    To help educate people in this area, we have answered frequently asked questions about fundraising in a new guide on our website. The guide covers concerns often raised about charity fundraising – including fundraising methods and expenses – and seeks to clarify this complex topic. For charities, the guide can act as a way to ensure your fundraising practices are responsible and meet the expectations of the public.

    To download the free guide, FAQs: Charities and fundraising, visit acnc.gov.au/fundraisingFAQs.

    The South Australian and Tasmanian State Governments have recently made announcements that will significantly reduce red tape for registered charities.

    The South Australian Parliament has passed the Statutes Amendment (Commonwealth Registered Entities) Act 2016. The legislation “switches off” state government reporting requirements, with charities continuing to report to the ACNC through the Annual Information Statement. The change also removes the need for a separate fundraising licence in South Australia for registered charities.

    Shortly after the South Australian Government announcement, the Tasmanian Parliament passed the Associations Incorporation Amendment Act 2016. This legislation will remove the requirement for duplicative reporting to the Tasmanian state regulator. This change will significantly reduce red tape for incorporated associations that registered with the ACNC.

    The amendment also harmonises the threshold for a “small” charity in Tasmania, meaning that approximately 3,000 registered charities with annual revenue of less than $250,000 will no longer be required to have their accounts audited.

    These developments will save charities significant time and resources. The South Australian legislation’s implementation date is 1 January 2017 and the Tasmanian legislation is scheduled to come into effect on 1 October 2016.

    We spoke with Willing Older Workers W.O.W! about their charity which provides practical and emotional support to people who are over 50 and unemployed or underemployed.

    What challenges does your charity face and how do you overcome them?

    Our biggest challenge is not having funding for all the administration costs. We rely on volunteers to keep us operational. Fundraising, keep the books updated and running the website and Facebook page are also challenging.

    What’s the most rewarding thing about the work you do?

    It's very rewarding when someone comes to us for help (usually after depleting all their savings and thinking of ending their life) and we can give them food and other assistance. To see them months later, alive and smiling, is heart-wrenchingly beautiful.

    What tips do you have for charity governance?

    Try to keep the books up-to-date – don't leave everything until just before the AGM is due.

    The most frequently asked questions of our Advice Services team.

    What level of detail is appropriate for board meetings?

    We do not prescribe a level of detail that needs to be met at board meetings. A tip to ensure your meetings are run effectively is to plan ahead. Know what the board members expect from the meeting and the items they want covered, so you can plan the agenda.

    How can I fix a mistake on my submitted Annual Information Statement?

    You can send an email to advice@acnc.gov.au to request that your submission be put back to ‘in progress’. Include your charity name, ABN and the year of the statement that needs amending.

    There is a message on my charity’s page on the ACNC Register that says ‘Charity to select subtype’ – What do I need to do?

    You need to log in to the Charity Portal and select a new subtype as your old subtype no longer exists. You will need to choose a new subtype that most closely matches your charity's charitable purpose. There is more guidance about this at www.acnc.gov.au/subtypeMsg.

    Does my charitable company limited by guarantee need to notify the ACNC that we have changed our Auditor?

    You are not required to notify the ACNC of appointment or removal of auditors for registered charities that are also companies. Please keep in mind that you are no longer required to notify ASIC of the appointment of an auditor but you are required to notify of the removal of an auditor.

    Do you have any tips on handling conflicts of interest?

    We encourage charities to have a written conflict of interest policy and register so any conflicts of interest can be managed and disclosed.

    There are quick tips on managing conflict of interest on our website titled Quick tips: Conflicts of interest. and a conflicts of interest guide

    The Institute of Community Directors also has an example of a policy Conflicts of interest policy.

    Are there any resources available regarding financial management and record keeping?

    There are financial management resources on our website at, acnc.gov.au/money.

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