Video transcript - Maintaining registration
Now that your charity’s registered with the ACNC, you’re probably wondering what you need to do to keep being a registered charity. Generally speaking, it’s not hard. If you wake up in the morning wanting to continue doing charitable work, it’s likely you’re already meeting the requirements of being a registered charity.
There are three key things that all charities need to do. There’s:
- continuing to pursue your charitable purpose
- being a not-for-profit, and
- meeting the governance standards.
There are also a few circumstances where the ACNC may cancel your registration. For example, if your charity has taken formal steps in insolvency - like a liquidator or receiver being appointed - or if it hasn’t met the ACNC’s requirements, like working for its charitable purpose.
Continuing to pursue your charitable purpose means that when you were registered with the ACNC, or when you applied to be endorsed with the Australian Taxation Office, you would have indicated what sort of charitable work you were going to do. So to meet this requirement, you really just need to continue doing that work.
Now of course, you can do things that are slightly different. You might go from helping primary school students one day, to helping high school students the next - which is fine. But if you change your charitable purpose, you just need to let the ACNC know. We’re not looking to be a roadblock to your organisation doing good work – we’re just asking you to let us know.
Charities also have to be not-for-profit. All charities are not-for-profit, but all not-for-profits aren’t necessarily charities. So then, what’s the definition of not-for-profit?
The name’s almost misleading really… Most charities do, and need to, make a profit - although you might know it more as a surplus. The main difference is that the profit goes towards the purpose of your organisation. For example, your charity’s profit could be invested back into the charity or spent on your charity’s activities.
And then there are the governance standards…These are a set of core minimum standards or rules about how charities are managed that apply to all registered charities except basic religious charities.
They’re minimum standards and the ACNC expects most charities will already meet most of them. For example, charities that already comply with obligations under incorporated association legislation or the Corporations Act will already meet most of the standards.
We also expect that most charities won’t need to spend significant time nor incur any expenses - including things like getting legal or other professional advice - to meet the standards.
Let’s go through them individually… Governance standard one says that a charity must be not-for-profit and work towards their charitable purposes. Charities must be able to demonstrate this and provide information about their charitable purpose to the public.
Governance standard two only applies to charities that have members. So if your charity has members, it must be accountable to them and provide them with a reasonable opportunity to raise any questions about the way the charity is governed.
Number three is related to a charity’s general obligation to comply with Australian laws. Your charity must not commit a serious offence or breach a law that may result in a penalty of 60 penalty units or more. What we’re talking about here are activities at the serious end of the scale. Things like fraud, or money laundering.
Number four is that charities have to be and remain satisfied that their responsible persons – such as board members, committee members or trustees – are not disqualified from being a responsible person. There are three parts… First, they can’t have been disqualified by the corporate regulator, the Australian Securities and Investments Commission, or by a court, from managing a corporation. Second, they can’t be automatically disqualified from managing a corporation under the Corporations Act, which includes things like being a bankrupt. And third, they can’t be disqualified by the ACNC Commissioner from being a responsible person for a registered charity. If they are disqualified in any of these ways, your charity has to take reasonable steps to remove them.
And finally, governance standard number five sets out that all charities must make sure their responsible persons know and are subject to duties. They include things like disclosing conflicts of interest, acting in good faith in the charity’s best interests, and not allowing charities to trade while insolvent. They’re really just the duties that most charities would be familiar with under the law, like director’s duties under the Corporations Act or under incorporated associations laws. For practical examples of how to comply, visit our website.
Now, for each of these standards the ACNC doesn’t set out exactly what you need to do to meet them. That means we encourage you to look at your own charity’s individual circumstances and tailor how you meet them in a way that is appropriate for your charity.
So there you have it. To recap, the three key things that all charities need to do to maintain their registration with the ACNC: Continue to pursue your charitable purpose, remain a not-for-profit and meet the governance standards.