In addition to looking at concerns about individual charities, the ACNC also looks at trends to identify broader areas of concern to focus on. To do this, we:
- analyse data and research about charities
- analyse the complaints we receive
- analyse findings from past reviews and investigations, and
- work with other Australian and international regulators to identify common themes and areas of potential risk.
When risks are identified, the ACNC may:
- provide information and guidance for charities on managing these risks
- carry out targeted compliance activity
- work collaboratively with other regulators
- issue alerts on emerging issues
Compliance concern: governance
Our analysis consistently finds that poor governance (management of a charity) is the main factor causing ACNC compliance activity. Concerns about governance affect charities of all sizes and locations, with many reported concerns involving charities that are relatively new (less than 5 years old).
The ACNC’s Governance Standards are a set of core, minimum standards that deal with how charities are run. Charities registered with the ACNC must meet the Governance Standards.
If a charity is no longer not-for-profit, or it is not pursuing its charitable purpose the ACNC would be concerned about its governance (specifically Governance Standard 1).
If charitable assets or funds are used inappropriately (such as to purchase private assets) the ACNC would investigate failures of responsible persons to meet their duties (Governance Standard 5) or if a charity is not being accountable to its members (Governance Standard 2).
The ACNC has tools and resources to support charities to meet the Governance Standards, including guidance on good governance, and protecting against fraud.
Issues and alerts
As part of our work in identifying broader concerns, where appropriate, we seek to alert charities and the broader community ongoing and emerging issues relating to charity regulation.
Overseas aid charities and terrorist financing
The not-for-profit sector has been identified as vulnerable to the risk of misuse for the purpose of terrorism financing. Charities sending money overseas may be at risk of their charitable funds being diverted or misused to fund terrorist activity, even if their intentions are to help in line with their charitable purposes.
It is important that charities have processes in place to ensure that their funds are safe from misuse and are being used for their charitable purpose. Overseas charities have obligations under law, including the ACNC Governance Standards, to do so.
- Attorney-General’s Department’s Living safe together, this includes a guide to help not-for-profits meet Australian obligations and other information on what you can do to help in Syria
- Department of Foreign Affairs and Trade (DFAT): Information about Australian sanctions
- AUSTRAC’s register of remittance organisations
- Australian Council for International Development (ACFID) list of member agencies. ACFID members are all signatories to the ACFID Code of Conduct, which includes mandatory annual report and financial management requirements
- organisations the Australian Government has listed as terrorist organisations