Welcome to the Autumn 2017 issue of ACNC Quarterly

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

From the Commissioner

Welcome to the autumn edition of ACNC Quarterly. We are pleased to provide a link to the recently released of Smallest Charities Report 2015.

This report profiles almost 19,000 of Australia’s smallest charities, those with incomes of less than $50,000 in 2015.

These charities had a combined income of over $300 million, and total assets worth $5 billion – a significant portion of the sector.

Over 68% of Australia’s smallest charities were operated only by dedicated volunteers in 2015. More than 430,000 people donate their time to small charities across Australia, providing vital support and services to their communities and those in need. We salute the contribution of these charities and volunteers.

Later this year the Commonwealth Treasury will organise a review into the first five years of the operation of the ACNC Act and the ACNC Consequential and Transitional Act as is required in the legislation. The review will run over six months from December 2017, and it is anticipated that consultation with the charity sector will occur as part of the review process.

We will publish more information on the review throughout the year. To be sure that you’re kept up to date, I recommend subscribing to my fortnightly Commissioner’s Column.

We are pleased to announce that the ACT Government tabled legislation on 30 January. These legislative changes will remove duplicate reporting between the ACNC and the ACT Government.

Under the proposed changes to the Associations Incorporation Act 1991 (ACT) and the Charitable Collections Act 2003 (ACT), registered charities will only be required to report to the ACNC. The ACT Government is keen to have the new arrangements in place by July 2017 so that associations and fundraisers will only have to report to the ACNC from 1 July for the 2017 reporting period.

On 2 May, the Victorian Parliament passed the Consumer Acts Amendment Bill 2016, which allows the Minister for Consumer Affairs Victoria to exempt registered charities from their reporting obligations to Consumer Affairs Victoria. We look forward to working with the Minister for Consumer Affairs, Gaming and Liquor Regulation, the Hon Marlene Kairouz, and Consumer Affairs Victoria to implement this streamlined arrangement.

We will continue to work with the other state and territory governments to reduce red tape for registered charities. We hope that there will be further announcements in the coming weeks and months.

I hope you enjoy this edition of the Quarterly.
Good wishes

Susan Pascoe AM signature
Susan Pascoe AM
ACNC Commissioner

In March, the ACNC published the Charity Compliance Report 2015 and 2016. The report discusses the ACNC’s compliance work over the last two years, and is the third such report we have published since December 2012.

Over the two-year period of the report, the ACNC revoked the charity status of 28 charities. A further nine charities had their registration revoked following a review of their entitlement to charity status by our Registration team.

In that period, the ACNC received 1,872 concerns about charities. This was a significant increase over the previous two years when we received 1,307 concerns.

Over the past two years, we have increasingly found that people running Australia’s charities are keen to work with us to resolve any issues we find during investigations.

For the majority of concerns we receive, the issues raised can be resolved by providing regulatory guidance and advice.

However, where we find serious misconduct and mismanagement, the ACNC will take firm action, including revocation of charity status.

While the vast majority of registered charities are well run, operate capably and professionally, and improve the lives of countless people, the ACNC recognises that it only takes bad behaviour from a small number of individuals in charities to severely damage the public’s trust and confidence in the charity sector as a whole.

We believe that there are many lessons that can be learnt from compliance matters, which is why we have published this report. This report uses aggregated data and de-identified information to give readers an insight into the compliance work of the ACNC. The case studies in particular give charities an insight into the kinds of issues we find when investigating concerns, and how we work with charities to resolve them.

The Charity Compliance Report 2015 and 2016 also sets out the ACNC’s areas of focus for charity compliance in 2017, and beyond.

You can find the full report at acnc.gov.au/compliancereport

Most charities need to handle sensitive information, for example the personal and financial details of donors when fundraising.

With increasing awareness of the importance of privacy, charities need to carefully consider how they manage and protect people’s information and data.

Managing donor and beneficiary data can be delicate, and mishandling this information can damage trust and confidence in your charity.

Our new guide, Managing people’s information and data, helps charities understand the importance of responsible information and data management. It provides a broad overview of charities’ ethical and legal responsibilities, as well as practical tips for responsibly collecting, storing and using people’s information and data.

Responsible management of people’s information and data is an important part of charity governance and is crucial to maintaining a good reputation for charities. A good relationship with donors, supporters, members and the public is too precious to risk by not having adequate policies and processes to safeguard people’s information and data.

Charities of all sizes need to consider information and data management, and our new guide is a valuable resource to help them navigate the issues involved.

Download your copy of the guide at acnc.gov.au/informationanddata.

The Charity Register is a free, searchable, database of Australia’s registered charities. While it has been searched 1.7 million times, we recognise that the search function needs improving, as does the speed.

We want to ensure that the information that we put on the Charity Register is what people are looking for, and is displayed in the most accessible, user-friendly way.

To evaluate and improve the Charity Register, we are working with members of the public and charities to understand what people look for when searching the Charity Register, to determine how we can best share that information.

Consultation will open later in the calendar year. Details will be publicised via the Commissioner’s Column, which you can sign up to receive via email at acnc.gov.au/signup, and on our social media accounts. We look forward to hearing your thoughts and suggestions in the near future.

In the meantime, you can explore the Charity Register at acnc.gov.au/findacharity.

Make sure your charity’s contact information is up-to-date

When we contact your charity, we use the ‘Address for Service’, and if it’s not up to date, then we can’t reach you.

While the Address for Service (AFS) can be a physical or postal address in Australia, the vast majority of charities use an email address. When using an email address, we always recommend that charities use a generic or corporate style email address, rather than a personal one.

For example, it is a good idea to use something like ‘info@charityname.org.au’ and give more than one person in your organisation access to the account. This protects your privacy and means that if one person leaves, we can still contact your charity.

It is critical that we have a correct and up-to-date AFS for your charity so we can provide timely reminders about your obligations – particularly when the Annual Information Statement is due. One of the most common reasons that charities miss their reporting deadline is because they did not receive our reminders.

It is also important to ensure that you enter your AFS correctly. Spelling errors and other mistakes in your AFS will mean that our correspondence does not reach you.

You can check your charity’s AFS details on your charity’s Charity Register listing at acnc.gov.au/findacharity. If your AFS needs updating, you can do so in the Charity Portal at charity.acnc.gov.au.

Upcoming due date for 2016 Annual Information Statements

Nearly half of all registered charities use a calendar reporting period (1 January to 31 December). For these charities, the 2016 Annual Information Statement is due soon.

To help these charities, we have released a series of resources to make the submission process easier for all registered charities.

These include a checklist, a draft worksheet and a question-by-question guide. Visit acnc.gov.au/2016AIS to read more or to submit.

Failing to submit your Annual Information Statement may result in consequences that range from receiving a red mark on your Charity Register listing, to financial penalties or ultimately having your charity status revoked – and losing access to Commonwealth tax concessions.

If you have any questions or concerns, contact our friendly Advice team on 13 ACNC (13 22 62) or email advice@acnc.gov.au.

Late filer charities risk penalties

Did you know that 93% of charities with a financial year reporting period have submitted their Annual Information Statement? The remaining 7% are at risk of financial penalties. To avoid penalties, charities are urged to submit now!

Since the summer edition of ACNC Quarterly, thousands of registered charities have submitted their Annual Information Statements.

While the majority of charities have done the right thing and met their reporting obligations, thousands of Annual Information Statements are still outstanding.

The ACNC Act gives the ACNC the power to issue financial penalties to registered charities that fail to meet their obligations. In February 2017, we issued penalty warning notices to several large charities (with annual revenue of $1 million or more) who failed to submit their 2015 Annual Information Statements. Most of these charities had reports that were 12 months overdue.

Further penalty notices may be issued to other charities that refuse to submit their outstanding Annual Information Statements and annual financial reports.If your Annual information Statement is overdue, act now!

You can submit your Annual Information Statement online at charity.acnc.gov.au.

Making it easier: submitting the 2017 Annual Information Statement

Each year registered charities are required to submit an Annual Information Statement, and we’re always working with the sector to make this process quicker and easier.

We want to thank everyone who participated in consultations following the 2016 Annual Information Statement process. In response, we’ve made a number of changes to the 2017 online form, including:

  • Improved auto-calculation for figures entered in the financial sections of the Annual information Statement form
  • The ability for charities to update details of their responsible persons through the online Annual Information Statement form, as well as upload their annual reports
  • The collection of information about charities’ full-time equivalent (FTE) staff.
  • Clearer alignment between questions about charities’ activities and beneficiaries.
  • Improved wording and guidance for charities intending to report as Basic Religious Charities. This follows a number of errors in this area during the 2016 Annual Information Statement process.

We’re also refining the help text featured throughout the online form, with better links between the form, resources on the ACNC website and support through the 2017 guide.

Importantly, this year’s Annual Information Statement will drive some of our most significant red tape reduction efforts yet. The ACNC is working with states and territories to reduce duplication in reporting on fundraising and incorporation details.

The 2017 Annual Information Statement online form will be available in late July; however, charities can begin preparing now.

Read more at acnc.gov.au/signingforms.

Reviewing your governing documents

All charities, except for basic religious charities, are required to comply with the ACNC Governance Standards.

When the Governance Standards were introduced in 2013, they included a temporary exemption (called ‘transitional arrangements’) that gave charities that weren’t compliant with a particular aspect of the Governance Standards some time to make any necessary changes to their governing documents (also known as a constitution, rules of association or trust deed).

The transitional arrangements were always intended to be temporary, and they will expire on 30 June 2017.

We think that for almost all charities, their governing documents will not require any changes. However, it is always a good idea to review your governing documents from time to time, such as at your next annual general meeting.

We will discuss how and why charities should review their governing documents in our next free webinar, ‘Running a charity’, on 23 May 2017. Register at acnc.gov.au/webinars.

Technology and the internet continue to transform the way charities and not-for-profits operate; with significant changes to the way organisations raise funds and attract donations, as well as communicate with supporters and the general public.

But the internet is not a risk-free environment, and your charity can quickly become a target for internet scammers who wish to steal your data, access your financial systems or just disrupt your day-to-day activities.

“Damn good advice on cyber-safety and fraud prevention” is a practical new guide from Our Community’s Institute of Community Directors Australia. The guide examines the steps charities can take to protect themselves against fraud, and provides guidance on addressing internet-based security risks.

Importantly, the guide emphasises ways your charity can stay safe online without the need for a massive outlay of money or other resources.

The guide is available (for free) at: communitydirectors

The National Disability Insurance Agency (NDIA) is rolling out a new program that will provide grants to organisations that support people with disabilities and their families.

The new program – called Information, linkages and capacity building (ILC) – may impact on charities whose activities assist people with disabilities and their families.

According to the NDIA, unlike the rest of the NDIS, ILC won’t provide funding to individuals, but to organisations. ILC is about providing opportunities for people with disabilities and their families to participate in and contribute to their communities.

The ILC grants program will support the not-for-profit sector and the broader community to effect real outcomes for people with disabilities and their families. This will also contribute to the sustainability of the NDIS in the long term.

The NDIA recognises that not-for-profit organisations are fundamentally part of the fabric of the community at a local level.

The Australian Charities Report found that 30% of registered charities in Australia support people with disabilities, with a total combined income of $52.2 billion, representing over a third of the total income of the charity sector.

The first funding round for both ILC Jurisdictional Based Grants in the ACT and the ILC National Readiness Grants have recently closed, and organisations should check the NDIS website for notification of future grant opportunities.

You can read more about ILC and sign up for the NDIS newsletter at ndis.gov.au/news/subscribe

We spoke with GIVIT about the work the charity does. GIVIT is a national registered charity connecting those who have with those who need.

What does your charity do?

Givit.org.au is an online registered charity that acts a lot like a charitable Gumtree. A lot of people have items they don’t need any more and want to give – we help find a new home for those pre-loved items by working with 1,300+ registered charities nationally and we do it entirely for free! GIVIT is also involved in disaster recovery management in Queensland and Western Australia.

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

As GIVIT is web-based and doesn’t warehouse items, we also don’t handle or deliver items, so arranging transport is one of the biggest challenges for us. However, we find that many people truly want to give and will go the extra mile – quite literally – to drop off items at a charity’s door.

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

We love receiving feedback from charities that have obtained items through GIVIT for their clients. A lawnmower, a washing machine, or even a pair of work boots could be a life-changing gift, and it feels special to be a part of that.

What tips do you have for charity governance?

Use charity governance standards as your road-map and imbed them into your policies, procedures and your strategic plan. Keep your team in the loop and be fair yet firm in your expectations and requirement for adherence.

If your charity would like to be featured in Charity Chat, email charitychat@acnc.gov.au

  • Fundraising rules and regulations
    We have published information about state/territory obligations, emerging issues in fundraising and external resources. You can find all this and more at acnc.gov.au/fundraising
  • Managing people’s information and data
    A guide to responsible collection, storage and usage of people’s information and data: acnc.gov.au/informationanddata
  • Address For Service
    A fact sheet explaining a charity’s Address For Service and why it is important to keep up-to-date: acnc.gov.au/afs
  • How-to videos
    Easy-to-follow video guides for completing each section of the 2016 Annual Information Statement: acnc.gov.au/2016aisguide
  • Data in the 2015 Annual Information Statement
    An analysis of the reporting errors found in charities’ 2015 Annual Information Statements: acnc.gov.au/dataintegrity
  • Study into financial reporting
    Anglicare Australia, the Australian Accounting Standards Board (AASB), together with us here at the ACNC, have launched a new issues paper on not-for profit sector reporting and accountability. The purpose of the issues paper is to encourage sector-wide participation in the national discussion regarding the Australian Accounting Standards, and their impact on the sector’s financial reporting arrangements. Read more at anglicare.asn.au

Advice Services’ most frequently asked questions

I got a notice about overdue Annual Information Statements, and now my charity status has been revoked. What can I do?

You need to submit your overdue Annual Information Statements. If you do this within 60 days from the revocation date, the reregistration of your organisation will be streamlined.

My small charity has financial figures for the year but hasn’t finalised the financial statements. What do I do?

If your revenue is under $250,000, you don’t need to attach your financial statements to the Annual Information Statement. Just key in the basic financial information in Section D.

Can I have an extension of time to submit my Annual Information Statement?

Extensions are only granted in unforseen extenuating circumstances. An inability to lodge due to you or your accountant being busy is unlikely to be considered extenuating circumstances.
You can apply for an extension by emailing reporting@acnc.gov.au. Include the charity name, ABN, basis for extension and the timeframe you are seeking.

I got a reminder about submitting our Annual Information Statement but we only just finished our reporting year. What’s going on?

If you have a reporting year that ends on a date other than 30 June, you can apply for a Substituted accounting period via the Charity Portal. This will fix the due date of your Annual Information Statement.

The ACNC webinar program for 2017 is in full swing with greater attendance numbers than ever before.

These free sessions offer a focused interactive discussion on particular topics, all designed to help people involved with charities better understand issues facing the charity sector and their obligations to the ACNC.

Upcoming webinars:

  • May 23: Running a charity – tips for running a well-governed charity and meeting obligations to the ACNC.
  • June 20: Completing the 2016 Annual Information Statement – an overview and helpful guide to answering all the questions.

Register for free, and check the full schedule of upcoming webinars or view previous webinars at acnc.gov.au/webinars.