About the organisation
An organisation applied to the ACNC for registration as a charity.
The organisation outlined activities that focused on providing refugees with access to education services, as well as pathways towards employment opportunities. It also detailed wider awareness-raising and advocacy work to support refugees.
About the application
The organisation applied for charity registration with several subtypes, including advancing education, advancing social and public welfare and promoting or protecting human rights.
The organisation also applied to be registered as a Public Benevolent Institution (PBI). A PBI is a type of charitable institution which is organised, conducted or promoted for the relief of poverty, sickness, destitution, helplessness, suffering, misfortune, disability or distress.
After examining the organisation’s governing document, the ACNC was satisfied it contained clauses requiring it to operate on a not-for-profit basis, and to provide surplus assets to a charity upon winding up.
The organisation’s governing document and registration application also demonstrated compliance with ACNC Governance Standards.
In its registration application, the organisation said it would conduct activities both in Australia and overseas.
The nature of the organisation’s work, as well as some of the areas in which it operated, raised further questions for the ACNC.
About the registration process
In its registration application, the organisation confirmed that most of its operations would occur outside Australia and listed the overseas countries in which those activities would occur.
Some of those regions were in areas designated as high risk, and the ACNC noted that the nature of the organisation’s work also carried with it an elevated level of risk – including the organisation sending money overseas, its work with a partner overseas (including in regions of high risk), and its work with vulnerable people.
It is important for the ACNC to determine that any organisation applying for registration as a charity has adequate steps in place to ensure that funding is directed to the activities outlined in its application, and not being used illegally or in a way that is not in line with the charity’s purpose.
The risks a charity will face when operating overseas depend on where it operates, the type of activities it undertakes and who it is helping.
Operating in some countries will carry greater risks for charities based on the level of security, any ongoing conflict or any issues related to government transparency, corruption or instability.
In assessing the risk of a country or jurisdiction, the ACNC will consider information provided by other government agencies and international bodies – including the Financial Action Task Force (FATF) and the Department of Foreign Affairs and Trade (DFAT).
The ACNC will examine the applicant’s financial management and how it aligns with the internal controls the applicant chooses to implement. Measures can include the applicant:
- ensuring funds are securely transferred overseas
- having clear policies outlining fund approvals, decision making and record-keeping for funds spent overseas.
The ACNC also considers the reasonable steps a charity takes to manage the risks associated with its activities outside Australia. This may mean demonstrating that overseas partners have policies, procedures, clear deliverables, record-keeping and accountability measures for the activities they oversee.
Charities may also need to demonstrate the steps they have in place to minimise the risk of harm, exploitation or abuse of vulnerable people overseas – including the charity’s employees and volunteers, as well as those who receive the charity’s services or benefits.
The steps may include requiring employees and volunteers to undergo police and Working With Children Checks, as well as ensuring they have appropriate skills, knowledge, cultural understanding and experience to safely and effectively deliver the charity’s services or benefits.
In response, the ACNC needed to assess if the organisation complied with the External Conduct Standards, so further information was requested about how it addressed the specific issues of operating in these high-risk overseas regions.
The organisation was able to provide this information through several documented policies and procedures, including:
- a code of conduct
- a conflict of interest policy
- anti-fraud and anti-corruption policy and procedures including:
- strategies aimed at addressing fraud and corruption in regions in which its programs operated
- frameworks to help the organisation and its people to identify, report and address instances of fraud if they occurred
- confirmation that payments overseas would be made through online bank transfers and PayPal
- written agreements with its current overseas partner organisation that detailed how they would work together to monitor and manage the overseas operations
- child safeguarding policies
The organisation also outlined due diligence processes and assessments it would use if its overseas operations expanded enough to work with new overseas partners.
After reviewing these arrangements, the ACNC was satisfied the organisation was in compliance with the External Conduct Standards.
However, the ACNC also wished to learn more about the organisation’s advocacy activities to understand how they related to its benevolent relief.
The term ‘advocacy’ can be used to describe a wide range of activities.
Advocacy can be a useful tool for a PBI to achieve its benevolent purposes. For example, a PBI may advocate in the form of direct representation for people in need in relation to legal matters. This type of advocacy provides benevolent relief of the client’s need.
PBIs may also undertake advocacy that is ancillary to the delivery of relief. For example, a PBI that undertakes activities to relieve distress may also advocate for law reform and social change to relieve distress.
There are some advocacy activities that will not be sufficiently connected with benevolent purposes to allow the charity that undertakes them to meet the definition of PBI.
The Commissioner’s Interpretation Statement: Public Benevolent Institutions provides more detailed information about advocacy and benevolent relief.
After contact from the ACNC, the organisation outlined the advocacy activities it had undertaken in the previous year.
This information indicated that its advocacy work focused on social change, was conducted in support of access to education – particularly for disadvantaged people – and was in fact ancillary to the organisation’s delivery of benevolent relief.
Outcome
The organisation was registered as a charity – and as a PBI – alongside the other subtypes it originally applied for: advancing education, advancing social and public welfare and promoting or protecting human rights.