I am pleased to present the Australian Charities and Not-for-profits Commission (ACNC) Annual Report for 2017–18, highlighting the overall achievements of the organisation in the previous financial year.
While 2017–18 was a period of substantial change and transition, the ACNC’s dedicated team has continued to work toward achieving the objects of the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (the ACNC Act), while supporting charities, and assisting the public.
I commend everyone at the ACNC for their commitment to both the Commission, and the sector more broadly. I would also like to take this opportunity to thank the inaugural Commissioner of the ACNC, Susan Pascoe AM, for her tireless work in establishing the Commission. Along with Murray Baird and David Locke, Susan built a world-class charity regulator, that has the support of the sector, the public, and government — no mean feat.
This was reflected in the final report from the mandated five-year review of the ACNC’s legislation which was published in August 2018. Strengthening for Purpose: Australian Charities and Not-for-profits Commission Legislative Review 2018 noted there was strong support for the ACNC and acknowledged our collaborative and educative approach. In total, the Review Panel made 30 recommendations with the aim to strengthen the ACNC’s legislative framework.
The recommendations focus mainly on the ACNC’s objects, functions and powers,
the overall regulatory framework, and red tape reduction for charities.
I welcome the report and its recommendations, and would like to thank the Review Panel, peak bodies, government agencies and charities for their contribution to the legislative review process.
When I joined the ACNC in December 2017, I was fortunate to take charge of the Commission as a mature agency, with over five years of experience, data and knowledge from which to draw. This has been invaluable in not only driving the ACNC’s work in 2017–18, but to shape the organisation’s future direction.
I am proud to share some of the ACNC’s major achievements in 2017–18, and provide insight into the future goals for the Commission.
Reduced red tape for thousands of charities
In 2017–18, I was pleased to announce that thousands of Victorian charities will benefit from new streamlined reporting arrangements. The ACNC and Consumer Affairs Victoria (CAV) worked closely over an extended period to end duplicated reporting obligations, which were costing Victorian charities both time and money. The large majority of registered charities that are incorporated as associations in Victoria will no longer need to:
- lodge an annual statement with CAV, or
- pay an annual statement lodgement fee to CAV.
Instead, these charities will continue to submit their ACNC Annual Information Statement each year, and the ACNC will share the relevant data with CAV securely on the charity’s behalf.
The ACNC also worked closely with the New South Wales Government throughout 2017–18 and on 10 September 2018, a new agreement that reduces the administrative burden on registered charities was announced by NSW Fair Trading and the ACNC.
The agreement, which will come into effect on 1 October 2018, allows incorporated associations that are also registered charities to submit their annual financial reports to the ACNC, and then we will securely share the data with NSW Fair Trading.
I would like to acknowledge the Victorian and New South Wales Governments’ commitment to reducing red tape for charities. While the ACNC can drive red tape reduction initiatives for charities, these can only become a reality through collaboration with our colleagues at the state and territory levels of government.
With these announcements, Victoria and New South Wales join South Australia, Tasmania and the Australian Capital Territory in their commitment to streamlined reporting arrangements for charities. I hope to be able to announce that more states have come on board in the ACNC’s next annual report.
Letting the data speak
One of the ACNC’s biggest assets is the data we are required to collect, by law, from Australia’s charities.
In the 2016 financial year, charities reported more than $142 billion in annual revenue, and they remained one of Australia’s most significant employers. Over 10 per cent of Australia’s workforce were employed by registered charities.
There are more than 56,000 registered charities dispersed across this vast country in numbers that generally reflect the population distribution. They provide a wide range of services and programs to the community — everything from health care to soup kitchens, local religious groups to overseas aid, child care to universities.
This data, which we will continue to make available each year, helps us better understand the size and scope of the charity sector. However, in future, we aim to make the information we collect more useful for donors, volunteers, and the sector itself.
One of my priorities for the year ahead lies in the concept of the charity market. Charities use images and data to sell their wares, to save a child in Africa, to rescue a stray dog, to save the planet. Donors buy those assurances. To me, that is a market.
A key component of the charity market is information; in particular, the cost of accessing and understanding information registered charities provide to the ACNC.
While the ACNC Charity Register is a useful tool to verify the registration status of a charity, it can be difficult for donors to understand the information it holds, and it cannot be used to search charities of comparable purpose easily.
To solve this problem, we are planning to apply a taxonomy of not-for-profit purposes to our data, so that donors can search for charities that do similar things, in similar locations.
This will help donors find charities that are delivering programs that are of interest to them in specific locations, and compare the information the charities have provided.
We are only in the early stages of this project, and there is much more consultation and discussion planned for the coming months. I will provide regular updates on the ACNC website.
Information technology (IT) project
In 2017–18 a considerable amount of our resources were devoted to a large-scale project to improve the ACNC’s IT environment, following $3 million in funding from the Federal Government to implement a fit-for-purpose system.
We are well on our way to having completely revamped ACNC IT systems, providing better functionality for all users. The range of improvements will include an updated ACNC website design and layout, improvements to the speed and reliability of the Charity Portal, and improved searchability and display of the Charity Register.
The IT upgrade project is on track to be delivered in October 2018.
While the vast majority of registered charities operate in a professional and responsible manner, there are a small number of charities that do the wrong thing and abuse their position and privileges. There are also charities that set out with good intentions but, due to poor governance or mismanagement, place charitable funds and assets at risk of misuse.
Where required, the ACNC takes appropriate compliance action against a charity to ensure public trust and confidence in the sector is maintained. The ACNC’s compliance powers include providing regulatory advice, enforceable undertakings, directions, suspending or removing board members, and ultimately, revoking charity registration. The revocation of charity registration is used only in the most serious cases.
In 2017–18, we revoked the charity registration of 22 organisations following investigations — this is the same amount as 2016–17, which was higher than any other year. Additionally, we dealt with nearly 1,900 concerns about charities, the highest number we have ever received.
In 2018–19, the ACNC will continue to increase our capabilities to proactively identify charities at greater risk of misuse and non-compliance. Our capability has recently been strengthened by the ACNC becoming a designated agency under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act). This allows the ACNC to have direct access to Australian Transaction Reports and Analysis Centre (AUSTRAC) information, which provides a rich source of data and intelligence to help us identify terrorism financing and money laundering risks in the not-for-profit sector.
Finally, I would like to thank the ACNC team for their hard work over the year, the sector for its ongoing support of the Commission, the Commonwealth Government, on behalf of taxpayers, for the funding that has allowed us to dramatically improve our IT systems, and of course you, the reader. I hope you find this report an interesting and engaging record of the ACNC’s performance in 2017–18.
The Hon Dr Gary Johns
Australian Charities and