Our September webinar explored how the ACNC helps organisations seeking registration as charities, as well as how we work to ensure charities retain their right to registration.
We looked at some of the things organisations should be aware of before applying for charity registration, as well as practical tips to avoid common issues we see that can delay charities' registration applications.
The webinar also looked at some of the work the ACNC does to ensure existing charities remain eligible for registration.
Hi everyone. Welcome to today’s webinar. Today we are going to explore how the ACNC helps organisations looking to register as charities, what we do, some of the things organisations should be aware of before applying for charity registration. And we’re also going to look at some common issues we see that may cause problems for charities when it comes to retaining their registration, as well as some of the actions charities can take to help themselves.
My name is Chris Riches, I’m from the Education and Public Affairs team at the ACNC. Joining me today is my colleague, Louis Hine. Louis, hi, how are you?
Hey Chris, not too bad.
We've also got Vlad Klendo from the ACNC's Registration Directorate joining us today. Vlad, how are you?
I'm good, thank you Chris, and yourself?
Yes, doing all right, doing all right. Now, first things first. We’ll kick off proceedings today with an acknowledgement of country. The ACNC acknowledges the Traditional Custodians of country throughout Australia, and their connections to land, sea and community. We pay our respects to them and their cultures, and their elders past, present and emerging. Today our webinar is being presented from Wurundjeri land, and we are coming from a number of locations, but we’re being coordinated from Wurundjeri land.
Also before we get rolling, we’ll cover off some quick housekeeping details. If you’ve got any troubles with the webinar audio, you can try listening through your phone. Call the number listed in the email that you’ll have received upon sign-up - there’ll be an access code and you can listen that way.
We’ve got some colleagues today, Emma and Gabby, who are going to be answering some questions in the background as they come through, so feel free to type in a question or two through the GoTo Webinar interface. They’ll be zooming through some questions as we progress. We’ll try and answer all the questions as they come through.
If we don’t, there is an email address you can send us a question or two, or if you’ve thought of a question after things have ended today, the email address is firstname.lastname@example.org; we’ll be able to help you out there. We are, as always, recording this webinar. Slides and the recording are going to be available up on our website at some stage in the next day or so.
We’ll also send out an email to everyone who registered for today’s session, and that’ll have a link to the recording and some other resources and links and bits and pieces too. We’ll be mentioning some of those website links during today’s webinar as well, so you don’t have to scribble madly; they’ll be in the follow-up email and they’ll also be in the presentation slides that’ll be available for download too.
Finally, we’d, as usual, like some feedback from yourselves, if you wish. There’s a little survey after we’re done today, it takes about 20 seconds to do, a couple of quick questions; and we’d love your input on those. So, first things first. What’s on the agenda today, Louis?
Let’s have a look. Today we’ll be covering three main areas throughout this webinar, which are some of the obstacles that organisations encounter when looking to register as charities, as well as some tips to address them. We’ll also be looking at some of the issues we see with charities retaining and maintaining their registration, and again, some tips on how they can do that. So, with those two, just a bit of context and perspective to help organisations and charities with those sorts of things. And finally, we’ll be taking a quick look at our program of deductible gift recipient reviews and the important place they have in helping charities to maintain their right to registration.
So, let’s just start with those organisations that are wanting to be registered as charities. And of course, an important starting point is to realise that not every organisation is actually eligible to be registered as a charity. So Vlad, could you please explain which organisations can actually be registered as charities with the ACNC?
Yes, certainly. When we assess application for charity registrations, the registration team has to make sure that all the components of the definition of charity are met. We also have to make sure that the organisation applying to be registered is a charity, has an active Australian Business Number or ABN, and complies with the ACNC Governance Standards and External Conduct Standards.
When we’re talking about making sure all the components of the definition of charity are met – that’s a little bit of a mouthful – we’re referring to some of the points that are appearing on the slide here, aren’t we, Vlad?
That’s right. So, this information is actually from the Charities Act. So, straight away it outlines that a charity must be, obviously, a not-for-profit. So it’s an organisation that does not operate for private profit or gain, both while it is operating, but also when it winds up. If an organisation is registered as a charity, it can generate profit, but must only use it towards its charitable purposes.
We often get some questions about that last point that you mentioned, Vlad, the idea of generating profit. Now, charities, not-for-profits, they can generate a profit or a surplus, but that profit must be ploughed back into the charity’s work and towards its purposes. And that’s the key. As you can see, there’s some information on the ACNC site about this, at the address there on your screen, acnc.gov.au/not-profit. What else, Vlad? What else do we need to cover?
Well, very importantly, registered charities must also have purposes that are counted as charitable. So, they must not have any disqualifying purposes, and also, may not be an individual, political party or a government entity.
So, on that point about disqualifying purposes there, Vlad, it definitely seems a little bit cryptic on face value. Could you just give us a little insight into what exactly that means?
Certainly. So, in a nutshell, it means the charity’s purposes cannot lead to engaging in promoting activities that are unlawful or against public policy; and that they not promote or oppose any one political party or a candidate.
And you mentioned the phrase ‘not being an individual’ a second ago, Vlad. That’s a good point, because it is possible to get an ABN as an individual or a sole trader, as they’re called, but this isn’t something that we can consider for charity registration, right? It needs to be some kind of group or trust then, something like that.
Yes, that’s right. So, you wouldn’t be able to apply for a registration as a charity if you’re a sole trader, for example. So it needs to be an organisation with a structure; something like a company, an association or a trust.
All right. Now, with that little bit of context and that little bit of background on who can be registered as a charity, we’re going to look at a couple of, as we’ve named them here, registration roadblocks. Now, on these elements that might slow registrations down, or provide a bit of a roadblock, the first one is proving not-for-profit status. Now, that’s obviously one that is quite important, but also one that you come across quite a bit there in registration, isn’t it, Vlad?
Yes, definitely. So, when an organisation applies for a charity registration and appears to operate as a not-for-profit, but if it doesn’t have appropriate clauses in their governing documents, that can be an issue with the application.
Okay. So, what are these appropriate clauses that you mentioned?
All right. So, what we’re talking about here, they’re what’s called a not-for-profit clause and a winding-up clause. So, a charity’s not-for-profit clause is a section in its governing document which explicitly states that any money the organisation brings in will be applied only towards its purposes. It notes that income and assets are not to be transferred to any member of the organisation, except for where it’s genuine compensation for services rendered or expenses incurred. So, for example, a charity cannot distribute dividends to its members the way a for-profit business can do to its shareholders.
Okay, that makes perfect sense. What about the wind-up clause? What’s the difference there?
All right. So, winding-up clause operates when the – basically, it lays out what the charity does when it wants to wind up or dissolve. So, the important part of being a not-for-profit is that when you raise funds for a specific purpose, you don’t just keep it for personal benefit when everything is over. So those funds still need to be used properly. That is, the charity must transfer any surplus assets, after paying out any debts, to another charity with similar purposes.
Of course, for any prospective applicants watching today, or listening today, we’d recommend reviewing your organisation’s governing document prior to applying for registration. Some organisations may require a long approval process, or one that involves a special general meeting to amend their governing documents. So, ensuring these clauses are inserted into your organisation’s governing documents prior to it applying for charity registration, may result in a speedy registration process.
That’s a great reminder too about putting these clauses into an organisation’s governing document. Again, we’ve got a link to the website here. We have templates on the ACNC website as well for not-for-profit clauses and winding-up, or as it’s sometimes called, the dissolution clause. Those templates are a good starting point, so go and have a look on our website for those. But it’s important to know that organisations need to tailor them to their own circumstances. So, they’re not just a cut and paste, they provide a very good basis; you may need to tailor them to your unique circumstances.
Vlad, we also touched on the requirement to have a charitable purpose to be registered as a charity. Now, that sort of sounds straightforward, but it’s relatively essential. What is a charitable purpose, and are you able to talk us through what the registration team might need to consider?
Certainly. Let’s start off with what is a purpose. So, an organisation’s purpose is essential where it directs its focus. So, to be registered as a charity, an organisation is required to solely pursue purposes that are recognised as charitable under law. So, any activities that a charity conducts should be in support of these charitable purposes.
Now, whilst we don’t have time to go into every single charitable purpose you could have as a charity, there is some great information on our website about it. I think it’s actually listed on this slide, acnc.gov.au/charitablepurpose. Some common examples of charitable purposes are advancing education or advancing health.
When we assess an applicant’s purposes, we consider its government document, and particularly its objects clause that outlines what its main goals are. We consider the activities it runs and any other relevant information. So, for example, what is shown on its website, social media or annual reports.
Okay. So, how would it work then if you were to look at the purposes an organisation puts forward in its application and you find that they don’t seem to match the activities it runs or the information that they put up on their website?
That’s a very good question. At the end of the day, we need to conduct a holistic analysis. So, if an applicant provides information to us that refers to charitable purposes, but in the public space, so on its website, its social media, et cetera, it demonstrates possible non-charitable purposes, then it would naturally require more in-depth analysis.
So, prior to registration application, an organisation should double-check any information it puts out in the public space, to make sure that it’s consistent with its stated charitable purposes.
Perfect. Of course. Another issue that crops up that can delay charity registration applications is linked to the governing documents.
Yes, definitely very important. Sometimes we receive applications without a governing document, or with a governing document that covers an entirely different legal structure. So, for example, a company using a governing document for an unincorporated association.
So, unless the applicant provides the correct governing document, we won’t be able to proceed with the registration application. It’s really worthwhile ensuring you understand what structure your organisation has, and whether the governing documents you use match that.
You should ensure your governing document has a clear statement of objects, as this details what the organisation is set up to do.
Perfect. That’s really important. And you can see a little more detail about what type of document you should be using, based on your organisation’s structure, on our website. You can go there at acnc.gov.au/governingdocument.
And just rounding back to charitable purposes, there are, of course, purposes that may be great for your community but which aren’t necessarily charitable.
That’s right. So, any purpose that’s not in line with the recognised charitable purposes we pointed to a moment ago, they’re not charitable.
So, just for clarity, you can get a glimpse of these charitable purposes at the link on the screen, acnc.gov.au/charitablepurpose.
We see that sometimes, with organisations like, say social clubs or sporting clubs and even some professional associations, that these might be great for what they do, but because they may pursue purposes that are not recognised as charitable under law, they are not entitled to charity registration.
Yes, that’s some pretty useful information there to address some of the common issues we see that can hold up some charity registration applications.
Vlad, are there any other areas that you would recommend prospective charities focus on when they’re looking towards applying?
Well, first and foremost, I definitely recommend clearly explaining in the application who the organisation is set up to benefit.
I would also recommend making sure that it’s clear that an organisation is not pursuing any purposes that may be disqualifying, such as what we discussed earlier, promoting a political candidate.
I would also recommend reviewing your internal operations to ensure that they comply with the ACNC Governance Standards, particularly being accountable to members and having good conflict of interest processes in place.
There’s more information about the Governance Standards, that’s at acnc.gov.au/governancestandards.
Of course, we mention on the screen here the need to comply with External Conduct Standards. Now, these standards are specifically for charities that have operations outside Australia, and we’ll revisit both of these sets of standards in a second, when we chat about retaining charity registration. What else is there, Vlad?
When submitting applications, applicants should ensure that they provide the details of all the Responsible People. So that means directors, committee members or board members, in the online form, and the number of people that are put down should be matching the requirements of their governing documents.
Further, it’s very important to have an active ABN, as we won’t be able to register an organisation at a date prior to the ABN being registered.
And again, we’ve got another link here, acnc.gov.au/responsiblepeople.
We’re going to go to the next section, in which we’re going to be looking at the obstacles to retaining charity registration. Louis.
Okay, perfect. So, we have covered some of those obstacles to actually getting charity registration. But what about those things that can cause issues when you’re looking to actually just maintain your registration, so you don’t get revoked from the register or anything like that.
First up, a pretty handy resource from the ACNC website, again here, is just acnc.gov.au/maintainregistration. A lot of useful resources there. This guidance provides a comprehensive rundown on the things a charity needs to do to maintain its registration with the ACNC. It is worth just highlighting the basic key information on this page.
To firstly gain and then retain its entitlement to registration, a charity has some basic obligations.
In short, for a charity to continue to be a charity, it must remain not-for-profit and have a charitable purpose, which is for the public benefit.
It must comply with the Governance Standards and, if applicable, the External Conduct Standards that we mentioned, if you’re operating outside of Australia.
You need to have an Australian Business Number that’s active, and not be involved in any terrorist or other criminal activity; pretty important one there.
A charity must also make sure it continues to work towards the purposes for which it has been registered. We talked about charitable purposes earlier on, and mentioned examples like advancing health or advancing education, and this leads us on to one of the more common issues we see in charities retaining their registration.
Yes. So, when we register charities, we register them with specific charity subtypes. So, these reflect their purposes or their work, and that’s actually one of the requirements of what a charity is for it to have a charitable purpose.
But in time, sometimes a charity’s purposes may change a little; it’s focus may change towards another purpose. Sometimes we call it a mission drift; it can be quite common.
It is common. We do see that quite a bit. But how does mission drift impact on a charity’s ability to stay registered?
Essentially, if an organisation is set up to pursue a charitable purpose, and with time it shifts its focus, then it may end up, obviously, with a different purpose.
Now, that different purpose might be another charitable purpose, which we were talking about just before. But also, we can have a mission drift where a charity drifts towards a non-charitable purpose.
So, for example, a charity might be registered with ACNC, let’s say with a charitable purpose of advancing culture. But over time, it stops engaging in cultural programs and becomes focused on running a social club for its members. So, at that stage, this charity may in fact be pursuing purposes that are non-charitable.
And again, this is common. It’s amazing how, over a period of time, over a charity’s life, things can change. And it can change or happen so slowly or so gradually that no one actually notices until the charity is a long way down the mission drift track, I suppose. And all of a sudden there might be a light bulb go off, and a bit of realisation; hold on, we were set up to do this thing, and now we’re doing this other thing; hold on, what’s going on here? That can end up being a long way away from what a charity was originally set up to do.
Are there reasons why mission drift occurs?
Well, there are probably many reasons, but one is where an organisation focuses on individual activities, rather than regularly referring to its core objects. So, what it was originally set up to pursue.
Another problem that we often see is the desire to do too much. So, an organisation or charity might start focusing on the relief of poverty, but then it decides to, let’s say, run a sporting program. So, even if the charity is still pursuing its original charitable purpose, by taking on new, potentially non-charitable purposes, its entitlement to registration actually becomes at risk.
Yes, mission drift happens so often. And it is, to be honest, not unusual. We see it quite often. But as Vlad mentioned, it can affect a charity’s entitlement to registration because it means an organisation that was previously charitable ends up pursuing non-charitable purposes.
So, the question is: how can a charity address this issue?
Some of these can be pretty simple.
We’d recommend that charities review their objects to ensure they reflect their current purposes. Reading back through the charity’s objects, if there are any discrepancies between what a charity does now and what it was set up to do, then objects should be updated accordingly with the relevant objects clauses. It may involve having a meeting, as per the rules of the governing documents, voting to amend certain objects.
It is important that charities notify the ACNC if they believe that their subtypes may have changed as a result of a change in their objects, or as a result of change in their purposes. So, charities can take an option to revoke certain charity subtypes that no longer reflect their purposes, and add new subtypes that reflect what they’re currently doing.
And of course, charities should avoid pursuing any purposes that are not charitable.
If charities need any guidance, of course they can reach out to ACNC for advice. Mission drift is common, as we’ve said several times, but any issues that cause this can be addressed.
That’s great. So, for the benefit of anyone listening out there, thinking, maybe there has been some mission drift happening in my organisation, I might need to update the ACNC on this kind of thing, I’ve got you sorted.
So, if you haven’t already, you can sign up at the ACNC Charity Portal at charity.acnc.gov.au, and to help you sign you up or sign into the Charity Portal, we’ve got some guidance on the ACNC site. You can see that on the screen here, just acnc.gov.au/charityportal. That’ll guide you through the whole process if you get stuck on any parts.
You’ll need to just use an email address unique to yourself when doing this, since every login is tied on to the name of whoever first signs up. Once you’re in, and assuming you can see the charity’s name in the middle of the page, just click on the charity’s name and continue through to either the ‘Manage other charity details’ or the ‘Charity details’ tab.
From here, you should see the option to change a charity’s subtype. That opens an online form that you can actually just fill in and provide us all the details about the updates you need, and that will just basically come straight to us; we’ll have a quick look and make sure those things are updated.
Another key thing to remember when it comes to maintaining your charity’s registration are its ongoing obligations.
Two key ones the charities need to comply with are the ACNC Governance Standards and, if applicable, the External Conduct Standards. Of course, we mentioned these a little earlier on in this webinar. Charities’ adherence to these Standards is a key ongoing obligation that they really must keep up with to retain their registration.
Just to clarify, Governance Standards are a set of core minimum standards that deal with how a charity is run.
So, a charity must remain charitable, operate lawfully and be run in an accountable and responsible way. There are six Governance Standards, and they’re described in detail on the ACNC website. There is actually a link on the screen.
Charities should review the Standards and ensure that they have processes in place to meet them. So, if a charity believes that it’s not meeting the Standards, it should consider amending its governing document or creating appropriate policies to ensure it does so.
And the External Conduct Standards apply only if your charity operates outside Australia. I mentioned that a minute ago as well. So, the Standards require charities to take reasonable steps to ensure appropriate standards of behaviour, governance and oversight when undertaking activities or providing funding overseas.
We have some great tips on ensuring your charity complies with both the Governance Standards and External Conduct Standards on our website, as well as self-evaluations that you can do to assess if you’re meeting both sets of Standards.
Remember again, charities must comply with both of these sets of Standards to retain their right to registration. So, we’re emphasising this a bit, but obviously it’s vital.
Of course, charities also have a number of reporting obligations that they need to fulfil to retain their registration as well. Vlad, what are maybe a couple that we could highlight here that we often see, and that can perhaps impact on charities when it comes to retaining their registration?
First and foremost, we see some charities that have had a change of contact details or a change of government document, or Responsible People, and they don’t notify ACNC of these changes. It’s very important that when there is a change, a charity notifies the ACNC of these new details.
Yes, and as you can see, we’ve got them there: governing document, Responsible People and the Address For Service, which is the primary contact details that we use to get in touch with the charity. Keeping these details up to date, this ensures that the information that we have on our Charity Register is accurate, and that we have all the information we need to ensure that we can contact charities if we need to, or to ensure that charities’ governance and oversight is adequate, those sorts of things, that they’re operating properly, that they’re operating in accordance to their purposes, and that there’s an adequate number of Responsible People in place.
And also, as we alluded to earlier, when a charity has applied to add a charity subtype, we may actually ask for any outstanding lodgements to be made.
This of course refers to Annual Information Statements, for example, AISs, as they’re sometimes known. So, making sure that the AISs are lodged, that ensures that a charity would not have its registration revoked through a double defaulter process.
It’s good you bring up the double defaulter process, actually, since this is probably one of the more common ways that a charity might lose its registration with the ACNC. When we say double defaulter, we refer to any registered charity which has failed to submit two or more Annual Information Statements.
If this happens, they’ll fall into the double defaulter process, and the ACNC will send them a notice, just letting them know that they have 28 days to submit all outstanding Statements before we have to revoke their registration. Before the double defaulter process occurs, though, the ACNC generally sends out reminders to charities when an Annual Information Statement is nearly due, or even if it’s become overdue already.
So we’ll give charities plenty of notice about what they need to do. It is really important, if you think you can’t do your Annual Information Statement by the due date, you let us know beforehand by sending an email or filling in an online enquiry at our website. And that’s just at acnc.gov.au/contact-us.
All right. We’ve looked at a number of factors that can be obstacles to organisations wishing to be registered as charities, and we’ve also looked at some things that sometimes trip charities up, when it comes to retaining their registration.
We’ve also offered some tips on how charities can avoid or address these issues, and to do so relatively easily.
The last thing we’re going to cover in our webinar today is a little bit of a look at our continuing part of our registration team’s work. It’s our ongoing program of deductible gift recipient, or DGR reviews. Vlad, can you shed a little bit of light on what this program is?
Certainly. The ACNC is again going through a selection of charities with a DGR endorsement. These reviews are a part of Federal Government reforms first announced back in 2017, and the ACNC receives funding to review approximately 2% of all DGR-endorsed charities per year.
This work’s pretty important, obviously. DGR-endorsed charities make up around about 40%, at last check, of charities that are registered in Australia. That’s obviously a large portion of charities in the sector.
The reforms and the review program, I guess they really have a few aims. The main ones here – we’ll just run through them – the first one is to ensure that tax concessions are provided only to eligible charities.
There’s another aim of increasing donor confidence when it comes to knowing that their donations will be applied to a charitable purpose. It helps protect the integrity of the ACNC Charity Register, as well as, obviously, information on the Register. Given the amount of visits and the amount of people searching on the Register, it’s very important that the information there is correct, is up to date and is accurate.
And the last point there is encouraging charities to, every so often, self-assess their entitlement to registration. And that last point, the encouragement of charities to self-assess, that’s a pretty key part of this review process, isn’t it, Vlad?
Definitely. These reviews are part of broader efforts to help charities evaluate, look critically at what they’re doing, and the aspects of their work that have an impact on the entitlement to registration. It also aims to encourage charities to ensure that they’re staying true to their stated purpose and charity subtypes
Now, we’re sort of returning to that idea of mission drift a bit here as well, aren’t we?
Definitely. Again, we see that mission drift can occur in long-established charities and can occur over time, and gradually. As we mentioned earlier, it happens; charities might need to self-assess or self-examine and consider making administrative and governance changes to ensure their purposes and activities align.
And in talking about mission drift, is it fair to say that the charities that are among those that could be selected as part of this DGR review are more likely to be older charities?
Yes, but let me backtrack a little bit. So, in 2021 and 2022, all charities selected as part of the reviews were Public Benevolent Institutions, or PBIs. So, for the review that will occur in 2023, the review scope has been broadened to include other DGR types in addition to PBIs, and so, as well as being DGR, other criteria for the 2023 review will be that organisations were originally registered as a charity prior to ACNC establishment, so that was on 3 December 2012.
So, going back to your question there, it will – in the current batch, all of them will be – so they will be essentially all the charities that have been established prior to – or registered, rather – prior to ACNC establishment.
Another requirement for the charities that we’re selecting is that the charity is not regulated by ORIC, the Office of the Registrar of Indigenous Corporations. This is due to already significant reporting burden that ORIC registered organisations have.
What is very important here is that if a charity is selected for review, it’s absolutely no reflection or indication that there is anything amiss. It doesn’t mean there’s something wrong with the charity’s entitlement to registration.
It is just more simply that the charity meets the selection criteria for this review, isn’t it?
That’s right. So, what’s important is that reviews allow the ACNC to work with charities on any issues that might come to light. So, as we’ve seen throughout the webinar, many of these issues can be addressed simply and quickly, and the ACNC’s aim is to work with the charities and help them take action so they can retain their registration.
So, we’re really here just to help, if the review uncovers any issues. We will work with charities to try to resolve any issues we find, and to find a way forward to help them retain their registration and DGR endorsement; this is our main aim.
Definitely. It may mean that we work with a charity to help them simply update their details. This could include providing an up-to-date governing document, or details of Responsible People. It might even see us looking at addressing that might have been caused by the mission drift.
Where we can, we will provide education and guidance to help charities address any concerns or queries we have, in order to support them if they need to take action.
When the time comes, we’ll be in touch with the charities about these reviews, wherever it’s relevant. And our communications with them will be really clear and really helpful as well.
Just on that too, there’s again – emphasise the availability on our website of the self-assessments that we have, that charities can go onto our website, have a look at them, work through them, just again, as a thing that they do themselves, and just have a little bit of a think and a little reflection on whether, for example, there might have been some mission drift, or whether there’s something that they may need to do.
So again, recommend that charities go and perhaps have a look at those self-evaluations and to keep them in mind. Now, we’ve gone through a bit today. We’ll sum up a little bit as well, in three or four quick points, just some things to remember.
The first one here, we talked about what the initial requirements are, when you’re looking to get registered as a charity with the ACNC, such as being a not-for-profit, having charitable purposes and not being an individual or sole trader. So again, remember those ones.
We’ve also, again, touched on the roadblocks that some perspective charities might face. That includes having the right clauses in their governing document to begin with. We also discussed the need to be clear about who you, as an organisation, helps, as well as some of the ways that your charity meets the Governance Standards and the External Conduct Standards. Charities also should make sure they provide details of all Responsible People when applying to register.
Third one, to maintain charity registration, charities need to be mindful of ongoing obligations. They might be notifying the ACNC of any changes to their details, especially to charity subtype, and making sure they complete their annual information paper.
The last one there, just again as a bit of a reminder there, that deductible gift recipient reviews that occur, just remember that our program – what it’s aiming to do and who we’re going to be looking at reviewing. Our aim is to help charities with DGR address any issues that might come up, but also to ensure that details are up to date, and just support them to help them out if they need to take any action. So, that’s some things to remember and to take with you as we wander onwards.
What are we – about 35 minutes in. We’ve probably got time for a quick question. We’ve had some questions come through both before and during the session here. Thanks again to Emma and to Gabby for responding to questions in the background.
One question – and I might put this out there for you to maybe discuss, Vlad. How can a charity avoid being seen or perceived as one that benefits an individual – sorry, I shouldn’t say charity; I should say organisation – benefits an individual rather than one that benefits the public. How can an organisation avoid that perception?
That’s a great question, and perhaps a little bit too technical to go into too much details for the purposes of this webinar. But in general terms, I think what we need to focus on is where the – going back to our discussion about charitable purposes, and where the focus is – the similar kind of concept applies to public benefit. Where is the focus?
So, for example, I gave you an example earlier of advancing culture; having a social club for its members. So, for instance, if you have an organisation that is set up to advance culture, so to create something that exists for a public benefit of the general public or of a group that is interested in this culture. It may be a linguistic group or it may be a cultural group that promotes the arts. That is something that is there not for your friends or family or for strictly your members; that is there for the general public benefit. So it is for the community at large, or it’s for a significant group of the community.
Whereas if you just create a club, a social club or a members only club that benefits its members, then that brings up the issues of supporting your own members, supporting individuals or supporting, let’s say, friends and family, that is different to creating something that is of benefit to the broader public. This is a very general answer; like I said, it actually can be a very technical topic, so of course, our listeners today can write in with questions or reach out to ACNC.
But as a general gist, this is where I would draw the line and I would say that if something is targeted at the broader public, at a group that is not connected to you, at a group – I wouldn’t say necessarily not connected to you, but a group where there’s arm’s length, distance between organisation and its beneficiaries, that’s much easier to tell that there is a public benefit, versus an organisation that is set up to benefit its members, for example.
Sorry, I was going to say, I’m nodding vigorously here Vlad, but of course, no one can see me nodding vigorously. That’s wonderful, and you’re right, it is, or can get quite technical, but that’s a pretty good distinction, as you said, where the line would get drawn.
We did have one more – and I’m mindful of the time – one that came through just before proceedings started today, and we’ve sort of answered it a little bit here, but just for a bit of emphasis, does an organisation’s constitution need to change if it becomes ACNC registered? Now, I’m reckoning I probably might be able to know the answer to this one, but Vlad, if you wanted to just explain or provide a bit of a response to that one.
Well, no, it doesn’t need to change if it becomes a registered organisation. Having said that, when – your constitution is something that we definitely consider as part of the entitlement to a registration or to a part of entitlement to a subtype of charity. So, what we actually do is we assess the governing document; it may be constitution or model rules or any other type of governing document your specific organisation has, and we assess whether it meets the requirements for charity registration.
If there is something that is missing, so for example, we discussed earlier, objects or not-for-profit clauses, things of that nature, then we may certainly reach out to an organisation and say that this is the kind of part, so to speak, that is missing from the governing document and that that would need to be amended.
But once an organisation is registered, then the governing document will remain as it is, unless it is changed for whatever purpose again, like if there is a change in objects later on, et cetera, et cetera. So certainly, if an organisation already has a governing document that meets our requirements – so it has the not-for-profit and wind-up clauses, it meets the Governance Standards, it has the objects that are solely charitable et cetera, et cetera, then we certainly wouldn’t reach out and ask the organisation to change its governing document for no reason. It’s only specifically when there is something that’s missing.
Definitely. Thank you again for that one, Vlad. We’re going to wind up, or wind down, depending on what the phrase is. Thank you very much everyone, for coming along today and joining us, particularly given that we had to reschedule this webinar from last week. So, thank you for your patience on that. We’ve got a number of ways that you can stay in touch with us: the website; there’s a number of social media down there; we’ve got webinars; obviously our web guidance and our Charitable Purpose monthly email has all the newsy bits and pieces about the ACNC as well.
So definitely sign up for that and keep an eye on all those links and bits and pieces that you see on the screen. Again, thank you very much for coming along today. Feel free to join us for our future webinars; we’ve got one scheduled for next month as well, so feel free to sign up.
Thank you everyone. Thank you Louis and thank you Vlad for joining us today as well. Thanks heaps. And thank you to Emma and to Gabby for answering questions.
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