About the organisation
An organisation looking to support people through several education-based initiatives applied to the ACNC for charity registration.
The organisation – structured as a charitable company limited by guarantee (CLG) – said in its application that its activities would be focused overseas.
About the application
In its application, the organisation outlined several activities based around building people’s skills and knowledge.
The organisation intended to:
- construct and maintain a community library to provide access to books and other educational resources
- provide equipment to support education outcomes
- offer activities to build community-based skills which, in turn, would support sustainability and economic development in the locations in which it worked
- provide facilities and resources that encouraged knowledge sharing and engagement with the community.
This work would be focused on a particular village in an overseas location. Young people, families, and people experiencing disadvantage would be among the intended beneficiaries of the work.
In its application the organisation stated it would partner with several other organisations – as well as people involved with those organisations – to help achieve its aims and evaluate the impact of its work.
This information, as well as other aspects of the application, saw the ACNC contact the organisation to seek further details.
About the registration process
As part of the registration process, the ACNC sought further information about the measures the organisation had in place to oversee its overseas operations and ensure compliance with the ACNC’s External Conduct Standards.
This included information on:
- financial oversight and controls
- anti-corruption measures
- steps to ensure vulnerable employees, third parties and contractors were safeguarded.
In response, the organisation provided a variety of policies, as well as outlining procedures and other measures it had established.
One of the policies the organisation provided detailed how it dealt with conflicts of interest affecting Responsible People – in this case, its board members. The policy:
- stated that the board was responsible for identifying, disclosing and managing conflicts of interest across the charity and monitoring compliance with the policy
- established the need to enter any conflicts of interest into the organisation’s register of interests, which would be maintained and regularly updated
- outlined the steps required for managing a conflict of interest, including how a conflict of interest might affect decision-making, and its potential impact on both the organisation’s operations and public confidence in the organisation
- included a mechanism to review the policy annually to ensure its effective operation.
Noting the organisation’s operations outside Australia, the ACNC explained how charities that operate overseas are subject to External Conduct Standards, and have further obligations when it comes to managing conflicts of interest.
All registered charities must comply with the ACNC’s Governance Standards. Governance Standard 5 requires registered charities to:
‘take reasonable steps to ensure its Responsible People are subject to, and comply with, the duty to disclose perceived or actual material conflicts of interest.’
Charities may choose to use an register of interests as a tool to record and track disclosed conflicts of interest. This is one of several reasonable steps charities can take – another is to adopt a policy requiring conflicts to be disclosed promptly, and promoting a culture where proactive disclosure is normalised and encouraged.
Following the introduction of the ACNC’s External Conduct Standards in 2019, registered charities that operate outside Australia must also take reasonable steps to ensure appropriate standards of behaviour, governance and oversight when undertaking activities or providing funding overseas.
A registered charity’s obligations under External Conduct Standard 3 include taking reasonable steps to:
‘identify and document any perceived or actual material conflicts of interest for its employees, volunteers, third parties and Responsible People outside Australia.’
While Governance Standard 5 focuses on conflicts of interest for Responsible People, External Conduct Standard 3 is broader and focuses on conflicts of interest for not only Responsible People, but also employees, volunteers and third parties.
This means the ACNC must ensure any organisation seeking charity registration which has indicated it will operate overseas has measures in place to address conflicts of interest for both:
- its Responsible People; and
- its employees, volunteers and any third parties outside of Australia.
The ACNC worked with the organisation to help it understand its obligations, as well as the areas in which its existing conflict of interest policy didn’t meet the requirements of External Conduct Standard 3 because it only focused on Responsible People.
This included providing it with a template policy from the ACNC website that it could adapt for its own use.
The organisation developed an updated conflict of interest policy which applied to all volunteers, employees and others working with it – both in Australia and overseas.
Outcome
After examining the updated policy – and considering the entire application – the ACNC registered the organisation as a charity.