Transcript

April:

Hello and welcome to today’s webinar. Today we’ll be discussing what you need to know about running a charity in regards to your ACNC obligations and the duties of your responsible persons, as well as some basic good governance principles.

My name is April Kitchenham and presenting with me today is my colleague Chris Riches and we are from the ACNC’s Education team. So I’ll hand you over to Chris now, who’ll take you through what we are covering today.

Chris:

Thank you April.

First off we will give a brief overview of the obligations that registered charities have in terms of keeping their charity status and registration with the ACNC.

We’ll spend some time focusing on the ACNC governance standards, particularly Governance Standard #5, which outlines the duties for responsible persons – we’ll explain that term in more detail too.

In the second half of today’s session we’ll go through some governance basics and some of the practical things you need to think about when running a charity.

And we’ll spend the last 10 minutes or so answering some of the questions that have come through via the chat function to the group.

Now I’ll pass you back to April to officially kick things off.

April:

Thanks Chris.

There are many obligations and responsibilities that come with running a charity and there may be many people involved in the everyday activities of running a charity – from the board or committee, to the CEO or company secretary, and of course, the staff and volunteers.

Ultimately, though, the main people that need to understand a charity’s obligations to the ACNC, and in general, are what we refer to as responsible persons.

When we at the ACNC talk about a charity’s “responsible persons”, we are referring to the people who are directly responsible for governing the charity. They are the members of the governing body and have ultimate responsibility for the way a charity is run and vote on decisions.

That’s an ACNC term, but you might be more familiar with them as your charity’s board or committee members, directors, or trustees.

It is this group of individuals who together are ultimately responsible for overseeing the charity’s operations and making sure it is working towards achieving its charitable purpose.

It is worth noting that responsible persons may employ staff to carry out some of the day-to-day tasks of a charity. If that occurs, the staff are responsible to – and would report to – the organisation’s responsible persons.

The ACNC has produced a useful factsheet on responsible persons.

But when the public talk about those who “run a charity”, it is usually a slightly more general term, which takes in a charity’s responsible persons, as well as others who might play a lead role in running a charity.

This might include, for example, a charity’s chief executive officer or the chief operating officer. And while these positions play an important role in running a charity, for ACNC purposes though, they generally don’t fit the definition of what we call a “responsible person”.

Chris:

So we’ve just gone through who is responsible for governing your charity, now it’s important to understand what your charity’s obligations to the ACNC actually are.

Charities which are registered with the ACNC must meet five ongoing obligations.

The first is to keep charity status – to remain eligible to be registered, charities must continue to be not-for-profit and pursue their charitable purpose or purposes.

The second point is to keep records – this includes correct and accurate financial records and statements.

The third is to report annually. This is done by submitting an Annual Information Statement – and, for medium and large charities, a financial report ­­– every year.

The fourth is to notify the ACNC of changes: This includes changes to the charity’s legal name, Address For Service, governing documents and “responsible persons”.

The fifth point is to meet governance standards – and that’s a set of standards that charities must meet to be registered, and remain registered, with the ACNC.

Those who are running a registered charity need to ensure their organisation complies with these obligations.

You can maintain your duty to notify, and your reporting obligations, by logging in to the ACNC Charity Portal.

You can see the link there on the screen; follow that and you’ll get to where you need to go.

Generally these obligations are in addition to obligations your charity might have to other Commonwealth, state or territory regulators.

More on these standards can be found at the ACNC website – acnc.gov.au/ongoingobligations.

April:

Moving onto the ACNC Governance Standards.

It is one of the obligations so we’ll just spend a bit of time going over each of the five Governance Standards.They are a set of core, minimum standards that deal with how a charity is run.

The governance standards are principles-based, which means your charity can decide how it will comply with them. But keep in mind that all charities, with the exception of basic religious charities, must comply with these governance standards.

The standards require that charities:

Firstly, be able to demonstrate that their purposes and character are not-for-profit, and that they work towards their charitable purposes, and they also provide information about their purposes to the public.

Second, charities take reasonable steps to be accountable to their members and provide them with adequate opportunities to raise concerns about how the charity is governed. Thirdly, charities not commit a serious offence (such as fraud) under Australian law or breach a law that may result in a penalty of 60 penalty units or more – not talking about a traffic infringement notice here, we’re talking about the big ones!

Charities take reasonable steps to ensure that their responsible persons are not disqualified from managing a corporation or disqualified from being a responsible person of a registered charity.

And finally, charities must take reasonable steps to ensure their responsible persons meet seven duties.

You can find more on these standards on our website – the link is at the bottom of the screen there.

We’ll just spend a bit of time talking about those seven duties, as they outline the key responsibilities that the board has to your charity.

Chris:

There they are there on the screen, there’s seven of them. We’ll just go through them now.

Governance Standard #5 sets down seven key duties which a charity’s responsible persons must comply with. They are:

  • to act with reasonable care and diligence
  • act honestly and fairly in the best interests of the charity and for its charitable purposes
  • to not misuse their position as a responsible person
  • to not misuse information they gain in their position as a responsible person
  • to disclose conflicts of interest
  • to ensure the charity’s financial affairs are managed responsibly
  • to not allow the charity to operate while insolvent

These seven duties provide a strong starting point to guide the actions and behaviour of those who are running a charity.

Any charity registered with the ACNC must take reasonable steps to ensure that the people running the organisation know and understand these duties and comply with them.

We’ll now explain each of those responsibilities in more detail and what you can do to comply with these standards.

April:

So the first duty is to act with reasonable care and diligence.

Joining a board means accepting a significant responsibility: to the charity, its members, its beneficiaries and also the broader community. If you are helping run a charity, you must take these responsibilities seriously.

The first duty requires responsible persons to exercise a degree of care and diligence in their roles.

This involves playing an active role in guiding and monitoring the charity’s development and management, and being aware of your obligations.

You also need to stay informed about the charity - that’s the work that it’s doing and the state of its finances. In addition to just knowing about these things, it is vital that you also understand them.

For example, if a responsible person receives key financial information about their charity, it is not enough just to read or look at the figures. There needs to be a level of understanding that goes along with that.

Other ways to comply with this standard are to read any board papers, ensure you are appropriately informed about any matter which you need to make a decision on, and be prepared for and attend board meetings on a regular basis.

Now, we’re all busy, but be aware that missing several board meetings in a row without a compelling reason to do so, might be seen as a breach of this duty.

It’s also important to remember that you can always ask for help or seek the knowledge of a professional or even the expertise of another responsible person – for example, the treasurer when dealing with a charity’s financial reports.

But you should always take care, and carefully consider any advice you are given and ask questions to ensure that you understand it.

Chris:

OK, so the second duty is to act honestly and fairly in the best interests of the charity and for its charitable purposes.

So if you are in a position of responsibility at a charity, your first priority must be to the charity.

Decisions that you make must be made from the viewpoint of the charity’s best interests, and what would further its work and charitable purposes.

These charitable purposes are often set out in an organisation’s governing documents – that’s a topic that we’ll return to a little bit later in this webinar.

So any personal interests, or interests of other organisations, need to be set aside. Your duty as a responsible person of a charity is to do the best you can on its behalf – to guide and shepherd it so it can be the best it can be.

Of course this duty can be breached if a responsible person uses charity property to benefit another organisation, or when an action they take is one which does not further the interests and efforts of their charity.

April:

Moving onto number three – responsible persons must not misuse their position.

Again, those in a position of responsibility at a charity need to act in the charity’s best interests.

Any actions which run counter to this are a misuse of that position of responsibility.

An example of a breach of this duty would be when someone running a charity uses their position to pay a company owned by friends or relatives, when there really is no reason to make such a payment – no goods or services have been provided to the charity.

Simply put, your role in running a charity is not to provide benefits to yourself or others, or to provide friends or relatives with a “leg-up”, so to speak. It is to ensure the charity is doing the best it can to further its purposes and assist its beneficiaries.

Misusing your position in this way will not only result in a breach of the ACNC’s Governance Standards, but can potentially lead to other serious, or even criminal, charges being laid.

Chris:

The fourth duty we are looking at is to not misuse information obtained in your duties.

Now most of us would be familiar with the term “insider trading”. That comes about when someone with confidential information about a company then illegally uses it to trade on the stock exchange to their own advantage.

Along somewhat similar lines, any responsible person has a duty to ensure that sensitive or confidential information relating to the charity and its operations they help run remains “in-house” and is not misused.

Now some might think that this duty only covers information related to a charity’s finances. But it is about far more than that.

Information about your charity’s operations, its staffing or personnel issues, future direction – even what happened at Monday’s night’s monthly board meeting … all of this information, all of these things, should be handled with discretion and respect.

Sensitive charity information can carry as much value as money. That’s very important. It needs to be used properly. Not doing so can put your charity at risk or damage its reputation.

April:

Moving onto number five – responsible persons must always disclose any actual or perceived conflict of interest.

There are always cross-overs between different parts of our lives – for example, cross-overs between the personal and professional, or work parts of our lives.

But anyone who serves as a responsible person for a charity needs to take care that the intertwined parts of our lives don’t improperly impact on the charity we serve.

A common way this can occur is when someone running a charity has a conflict between their personal interests and those of the charity – a conflict of interest.

Now, for a charity’s responsible persons, having a conflict of interest don’t necessarily need to be a bad thing.

The key is how they are managed.

As part of their duties, responsible persons should properly address any actual or perceived conflicts of interest.

This means a clear and open disclosure of any conflict between their duty to act for the charity and their personal or private interest, as well as making sure they are not part of any discussions or decision making on a matter where there is such a conflict.

So for example you should remove yourself from the room when these discussions take place.

You should also ensure that your charity has a policy on conflicts of interest and even maintains a register of interests.

Importantly, this type of approach should also be followed even if the conflict of interest is perceived rather than actual – a conflict should be disclosed whenever an independent observer could doubt that a responsible person is acting in the best interests of the charity.

Chris:

The next duty we’ll look at – number six – is to ensure the charity’s financial affairs are managed responsibly.

Now, not everyone who is in a position of responsibility at a charity has to be a financial whizz. Of course, having a treasurer who knows their way around ledgers and financial statements is highly advisable!

But for a charity’s other responsible persons, there should be an expectation that they will read financial statements and know enough to be able to ask questions or raise concerns when they need to. They can’t fly blind.

Charities should also have processes in place to manage their money responsibly and to protect themselves against financial mismanagement or fraud.

Again, there’s more information available about those issues at the ACNC website.

April:

And the last duty – number seven – is that you must not allow your charity to operate while insolvent.

Following on from the section Chris just went through which looked at ensuring a charity’s financial affairs were managed properly, responsible persons have a duty to not allow a charity to operate while insolvent.

Insolvency is when an organisation cannot pay all of its debts when they fall due.

If a responsible person reasonably suspects that the charity cannot pay all of its debts when they become due, then the responsible person should take all reasonable steps to prevent the charity from taking on more debt.

In addition, a charity’s board should regularly review its financial position and ensure there is enough money to pay for its activities.

Chris

Cool. Thank you April. We’ve looked at the duties and responsibilities that responsible persons have under ACNC legislation, but what about governance practices in general?

Registered charities should strive to practice good governance to ensure that their charity is effectively and properly run. A charity with good governance has strong processes as set out in their rules, and the roles and responsibilities of people within the charity are clearly understood.

Doing so goes a long way towards helping ensure their organisations are:

  • well run,
  • working effectively for the communities and people they support, and
  • operating in a way which enhances and maintains the public’s trust and confidence in both the organisation itself, and – on a wider level – in the charity sector overall.

Governance plays a central role in the life of charities, but how it looks in practice will vary.

We’ll outline a number of these general good governance principles and practices over the next half of this webinar, and provide some tips for those running charities. Some of these principles may also tie into some of the ACNC’s requirements for registered charities as well.

We’ll also highlight a number of useful resources and support materials available online which might be able to help your organisation.

April:

So, meetings.

One of the main examples of governance practices for charities is holding meetings to ensure that your members are kept informed about your charity’s activities.

Each charity will organise and run board, committee or sub-committee meetings in subtly different ways depending on all sorts of variables:

This can include the type of organisation, its work, stakeholders, partners; the types of people in positions of responsibility at the organisation – their relationships, for example – and how big the organisation is.

Even the time of year – some organisations will be busier at certain times of the year and may wish to meet more often to ensure things are on track and heading in the right direction.

The ACNC has a great guide on holding meetings. We’ll pop the link in the follow-up email, and we’d recommend any responsible person reads through this guide, especially if they are new to their role.

Chris

Linked into the issue of meetings are agendas. Agendas are a pretty key step towards a well-run meeting. Your agenda should include:

  • what is to be discussed at the meeting and the likely time for each item
  • who is responsible for leading the discussion on each item
  • and the purpose of the item being discussed – does a decision need to be made or does it just need to be noted, is it just for information, is advice being sought or is the matter for discussion only?

Doing this work before the meeting will help ensure you invite the right people to the meeting to provide information or advice, that any support material for items on the agenda is prepared and board members are well informed in advance.

It will also improve the effectiveness and efficiency of any meeting, as well as provide direction to meetings which, as we all know, can threaten to drag on for hours without any progress or resolution.

Again, refer to the ACNC’s guide, which we will send out a link to at the end of proceedings today. There are also a number of great resources from other organisations like the Governance Institute, Justice Connect or Our Community. All of them are listed and linked to on our site.

April:

Another major part of a charity’s governance is the annual general meeting.

An AGM basically sees organisations present a report to their members about how the organisation is travelling financially and what it has been doing over the past 12 months.

A charity might use its AGM to make changes to its governing documents or even its name. In addition, most groups also have their board elections at their AGM – meaning a charity’s responsible persons may change at this time.

Those running a charity need to be aware that if they use the AGM to change its legal name, alter its governing documents or change its responsible persons, the ACNC must be notified.

And that’s all done through the ACNC Charity Portal with your user name and password – which you should all have, but if you not you can reset it on line or give us a call and we can help you.

There is no specific requirement under ACNC legislation to hold an AGM, however holding an AGM might be a good way for your charity to demonstrate that it is accountable to its members underGovernance Standard #2.

There is also no requirement for charities to advise of the date of your AGM or register your upcoming AGM with the ACNC. However, you will still need to follow any requirements around holding an AGM as set out in your governing documents, model rules or articles of association.

Charities might have a number of obligations to other Commonwealth, state or territory agencies around the staging of an AGM; that might be due to your legal structure, for example. If that’s the case, be aware of these requirements and continue to follow them if applicable.

And again, we’ll link you to the resource on our website which contains more information about running your AGM.

Quick tips: Holding your annual general meeting

Chris:

April has just touched briefly on the idea of governing documents, but we’ll go into them in a bit more detail now because it is important for responsible persons to ensure they are familiar with what these documents say and contain.

Generally, governing documents are formal documents which set out the charity’s charitable purpose or purposes – what it does, who it works with or helps. They also set out that the charity operates on a not-for-profit basis, and the way that the charity’s board or committee makes decisions and consults any members.

Now, for such important documents they are often just stashed somewhere in a filing cabinet, on a shelf somewhere gathering dust … sometimes they can even be lost or misplaced.

And those who do have them often only refer to them to settle disputes or to quote from when filling out forms.

It is important that those running a charity are not only familiar with their organisation’s governing documents, but that they are regularly updated and are “living, breathing” relevant documents that accurately reflect what your organisation is about.

Remember also, the ACNC needs to be notified of any changes you make to your governing documents, as well as receiving a copy of the changed documents. We do have a factsheet – that’s www.acnc.gov.au/governingdocument – again, we’ll include that web address in the email we’ll send out.

April:

Another thing to be on top of are board inductions and handovers.

Managing the comings and goings of charity board members and responsible persons is an important part of ensuring that an organisation continues to work effectively towards its purposes.

A charity which grinds to a halt whenever a key office bearer or board member moves on, or is replaced, is not one which has undertaken adequate succession planning or which has appropriate change management or handover procedures.

Anyone who helps run a charity has an important role in ensuring these transitions are as smooth as possible.

Responsible persons should ensure there are adequate, documented handover processes which help newcomers get up to speed quickly.

Part of this process might be the development of a board member “welcome pack”, which could include your charity’s policies, including a copy of its governing documents, information on important policies and procedures – and that could include your charity’s username and password to access the Portal that we touched on before – and and other documents that are relevant, your most recent annual report.

You could also arrange to have a new or incoming responsible person “shadow” someone already in that position for a day – to follow them around and learn about their role, what they do, who they work with, etc.

Chris:

The next slide we’ll look at is conflicts of interest, which again we’ve touched on already. The ACNC has a great guide on managing conflicts of interest – it is available at: www.acnc.gov.au/ACNC/conflictsofinterest. Again, we’ll send the link out with the email.

A charity’s responsible persons need to ensure they properly declare any actual or perceived conflict of interest. In general, the responsible person should disclose the conflict of interest to the other responsible persons.

If there is only one responsible person or all of them have a conflict, then the conflict of interest should be disclosed to the members of the charity if there are any. If none of these situations apply, we’d ask you to contact us on 13 22 62 and have a chat about the situation!

Notably, we mention both actual and perceived conflicts of interest. It is best practice to ensure that even the appearance of a conflict of interest is declared so that further discussions and decision making on the issue at hand are conducted in a proper way.

April

OK, our next one is responsible financial management.

A key responsibility for those running a charity is to ensure their organisation has the resources it needs to carry out its work.

This means a charity’s responsible persons not only need to gather the resources required for the organisation to do its work, but safeguard those resources and ensure they are used in an efficient and lawful way.

This covers things like reserves, budgeting, spending and other elements of financial management.

Board and committee members should have enough financial knowledge to make informed decisions on their charity’s finances. Every board member must be able to read and understand a charity’s financial information, as they can’t make informed decisions or ask informed questions if they don’t have the knowledge to do so.

This might mean you want to seek some financial literacy training, and there are plenty of courses around. It can also be useful for them to ask questions of your charity’s treasurer to learn more if they are unsure of something.

We do have a guide –Managing Charity Money– we’ll send that link out as well in the follow up email.

Chris

OK our next slide looks at recordkeeping.

One of the core responsibilities of registered charities is they need to keep records. Not only does keeping records help you meet your obligations to the ACNC, but it’s also good practice and will help your charity to do its work efficiently.

A record is a piece of information that shows your charity has operated or acted in a particular way, or has spent or received money or other assets.

It might be something as simple as a receipt, docket or proof or purchase, for example. These would be classed as financial records.

Operational records would consist of documents which show how your charity is working towards its charitable purpose and how it meets its obligations under the ACNC Act, or under tax law, etc.

Charities have recordkeeping obligations under a variety of authorities, and depending on the size of your charity, recordkeeping obligations may vary.

The ACNC’s recordkeeping obligations include your charity, keeping certain written financial and operational records, keeping the records for seven years, and keeping them in English or in a form that can be easily translated into English.

Now, those records can be kept in a format you choose, as long as they are easy to find. You can develop your own system or process to keep those records as well.

Now, your charity does not have to provide records to the ACNC unless asked.

It is important that those running a charity know what their recordkeeping obligations are, and who it needs to report to. Keeping proper records has a number of other benefits for your charity.

It can help show it is continuing to be run as a not-for-profit and working towards its charitable purposes – and in doing so should remain eligible to be registered as a charity.

It can help your charity understand whether it is in good financial health, assess whether the right kinds of decisions are being made – both operational and financial.

It can help communicate about your charity’s activities and finances, and help your charity prepare reports to meet your reporting obligations to the ACNC, other government regulators, donors/funders, members of the public … and show that your charity meets its obligations under the ACNC Act, tax and other relevant laws.

Again, we have a couple of very useful resources on recordkeeping, and a useful recordkeeping checklist as well. They will be included in the email we send out after the webinar.

April:

The next item to consider is responsible fundraising.

The vast majority of charities fundraise at some stage.

For those who are running a charity, ensuring that their organisation is doing everything it can to raise money responsibly and in a way that engenders public trust and confidence in their group, and even the sector, is paramount.

Responsible persons of charities need to be across any fundraising activity their organisation is doing – not only to ensure it complies with the various regulations across Australia’s states and territories, but that it is conducted responsibly.

Charities in Australia and particularly in the UK have run afoul of public opinion ­ – and the law – by doing the wrong thing when asking the public for donations and support.

Responsible persons should consider if their fundraising meets community expectations in a number of areas, including:

  • how they approach or engage with vulnerable people when fundraising
  • how they manage people’s data that they gather
  • how they can work with fundraising agencies in a responsible way
  • the challenges and opportunities of online fundraising, including donations and crowdfunding

They should also consider whether the fundraising method they are considering using is the most effective and efficient one for the task at hand.

We have a fundraising hub on our website, and that goes through all the different fundraising regulators – as the ACNC doesn’t actually regulate fundraising. So that’s a good starting point if you are thinking of fundraising and want to find out more information.

Chris:

The next slide looks at internal disputes, and internal disputes handling.

Arguments and conflicts can easily degenerate into ugly affairs which hurt organisations, affect their reputation and reflect badly on the wider sector.

Such disputes can be across the board table, between volunteers, between staff members or others.

The first thing to remember is that not everyone has to get along like a house on fire or be best mates. There are all manner of personalities which co-exist inside charities – not everyone has to get along all the time.

However, what is important is that the work of the charity – charitable purposes – remains paramount. People can just co-exist, or perhaps not get along, but once this starts to impact on the charity as a whole the situation becomes a problem.

It is a good idea to set in place policies on how to handle disputes – how to arbitrate them, as well as dispute resolution procedures and techniques.

Those running a charity should be familiar with these procedures. But they should also be prepared to intervene where required or refer things onwards to other authorities.

Finally, don’t run into trouble with related issues like bullying or harassment – this can see your charity hit legal trouble and its reputation take a hit too.

I think April is going to have a quick chat, or touch on some of those issues, in the next slide.

April

Yes, the next slide covers staff and volunteers.

We’ve got some figures there, and it might interest you to know that charities employ over 1.2 million staff, that is 10% of Australia’s workforce – behind only the retail sector I believe.

Further to that, four out of charities engage volunteers – and that’s three million volunteers overall.

Now, if this is the case for your charity, you need to ask yourself:

Do you have policies on volunteer management or staff management?

Do you have approaches that cover any allegations of bullying or harassment? OHS safeguards? Volunteer or staff recruitment? Internal dispute resolution? And even discrimination?

Even policies or procedures covering how you manage staff and/or volunteers when staging fundraising or special events is something you need to consider.

Charity staff and volunteers are, in many ways, the lifeblood of an organisation. Harnessing their passion and commitment to your cause is vital, and that’s in addition to ensuring they are looked after.

A charity’s responsible persons should ensure that anyone working for, or volunteering with, their organisation is looked after. That includes:

  • them being covered and protected by adequate policies and procedures,
  • that their efforts being respected and appreciated by the organisation,
  • that they feel a part of the organisation – that they are welcomed with a good induction, are clear on their role and are led well.

It is also important to remember that your charity will have different legal obligations depending on if someone is an employee, volunteer or even a contractor.

It sounds obvious, but if your charity is thinking of taking on employees, they’ll also need to be paid properly – and that includes contributions to their superannuation and money to cover for leave entitlements and for resources they might need to do their job.

We’ve mentioned this many times before, but we do have resources covering how charities should work with volunteers and employees, and we’ll send those links to you all as well.

Chris:

Now, of course all of this, all of what we’ve mentioned in this webinar, it isn’t an all-encompassing list. But it is a general guide which is designed to help those running a charity to cover bases, be aware of what they need to do, be aware of general good governance practice and to lead them to resources which can help them in their roles.

Many charities will have unique individual requirements.

But having a solid foundation of knowledge, policy and procedure, and an awareness of your responsibilities can go a long way towards helping your responsible people fulfil their roles successfully, confidently and in a way which helps your charity achieve what it sets out to do.

As you can see we’ve got some of those links we have talked about – we’ll forward the rest of them to you.

Now, this is the end of the formal presentation today. What we’ll do now is open it up to questions – we’ve already got a couple by the looks of it which we might quickly jump onto.

The first one we’ve got is asking about registering for tax deductible donations, which is probably something that responsible persons, board members should be aware of – particularly if they are new to the role, or if they have a new charity or new organisation going.

So there are organisations that are eligible for tax concessions; they are classed as DGRs or Deductible Gift Recipients.

It is important to know that not all charities can be endorsed as DGR. The ATO has several categories of DGR in fact. A charity needs to fit one of these categories to be endorsed … and not all charities will fit into a DGR category.

This is how it is done. The ACNC – that’s us – assesses an organisation to determine whether it is a charity.

Then it passes the details to the ATO – the Tax Office – to endorse the charity for the tax concessions it is eligible for. Certain types of charities are eligible for a DGR endorsement, but most are not.

We will provide a link to the ATO’s categories in the follow-up email after the webinar. It looks like we have another question …

April:

We have a question from what looks like a new board member of a smaller charity asking about the reporting requirements relating for small charities. We touched a little bit on the reporting requirements of small charities but this is a good opportunity to go into it a bit more.

All charities – regardless their size – must submit an Annual Information Statement, unless of course they are registered with ORIC, which is the Office of the Registrar of Indigenous Corporations. If so, they just need to report to that regulator.

The Annual Information Statement includes questions about the charity and its activities – what it has done throughout the year – and asks for some financial information as well.

How much information depends on your size. So small charities won’t have to provide us with any sort of financial statement – just answer the basic financial questions in the form.

Medium and large charities though, they do need to need to submit an annual financial report on top of responding to the questions in the Annual Information Statement. And that needs to be either reviewed or audited depending on their size.

Small charities can do that if they want. It isn’t compulsory, but if they do, that information will be displayed on the register along with the rest of their annual information statement.

OK, so there’s another question Chris, I guess following on from that question about reporting requirements – is there a requirement to have financial reports audited.

Chris

Again, that depends on the size. If your charity is small there’s no ACNC requirement to have financial reports audited. But that changes if your charity is medium sized the ACNC requires that you have your financial reports either reviewed or audited.

And there are some requirements on who can perform these tasks to ensure they are done properly.

If your charity is large, you have to have your financial reports audited.

We have a good resource at www.acnc.gov.au/reviewaudit which will help you out and spell out the specifics depending on the size of your charity.

Now, we’ve got one here – looks like someone who might be a volunteer or working with a charity. They’re involved in a charity but are interested in becoming a board member and they’re asking what they should think about before perhaps jumping onto the board.

First up, good on you for trying to jump onto the board. Well done.

April:

In saying that there is a lot to think about in taking on a role on the board. Most importantly you should probably think about whether or not you have time to do so.

You need to make time for those meetings, to take the time to be aware of the charity’s happenings, and a lot of the time you’re going to be doing it on a volunteer basis on top of your regular Monday to Friday, nine to five job.

So it is important to think about whether you have the time and resources to devote enough of your energy into the charity and its purposes and its beneficiaries.

So just have a think about, realistically, the time and effort you can devote to doing the job properly. We’ve gone through a lot of the obligations and responsibilities that responsible persons need to be on the ball with, so that’s something you need to take into consideration.

So by all means we do encourage you to take up positions on the board – it is a rewarding and fulfilling position to be involved in. But just consider the impact that will have on the rest of your obligations you might have outside the charity and whether you can balance the two.

Chris:

Another good idea might be that if you’re part of an organisation, they know you and you are familiar with them, you should feel free to wander up to someone who might be a board member or someone who might be a responsible person and just say to them:

“I might be interested in jumping on the board here. What are some of the things which this organisation would require of me to ensure I am doing the job properly? What sort of time and effort would you expect?”

All that sort of information so that you are jumping on and you are fully informed.

April:

Absolutely, do your research.

Chris:

Yeah. The worst thing that anyone can do – and by no means are we saying don’t join a board because that’s the last thing we want to do … prospective board members are usually welcomed with open arms.

But few things worse than if someone wishes to jump on board but can’t actually offer the level of commitment required. Because this actually can cause problems, and that can cause issues on the board. It can do more harm than good if you’re not doing it quite right.

So if you can’t put aside the level of commitment that’s perhaps required, be honest with yourself and have a bit of a think about whether you should be joining the board or whether you should just be staying in the position you are – as a volunteer perhaps, or there might be some other position or some other role you can play that better suits what you can offer.

April:

Thanks Chris.

We’ve probably got time for one or two more. There’s a question here about someone wanting to know where they can increase their financial literacy.

Where they can get some more information or any sort of training. Anything you can think of Chris?

Chris:

There’s a few organisations around. They might include the CPA, the CAANZ, Accounting for Good is another. There are a number of organisations that offer these types of tailored training, and they are tailored to not-for-profit board members or charity board members.

Again we have a link on our website that we’ll send to people at the end of the webinar.

But also, if you are familiar with these organisations go to their websites and have a look. If you are on the board, you fellow board members, your CEO, your treasurer may have links to information on organisations that offer this type of training. Have a word to them as well.

Now we are getting lots of questions through and Matt who is working behind the scenes here is typing like crazy, actually. But we are not going to be able to answer all of your questions straight up right now.

But what we will do is – all of the questions you send through get saved, we retain them and we can answer them via email as a follow-up.

So feel free to ask your questions, send them through to us. If we don’t get to you straight away Matt will be typing away for another 10 or so minutes after we wrap up and beyond that we will get back in touch with you with responses to your questions afterwards and in the coming couple of days.

April:

That’s really about all we have time for today. Thank you everyone for joining us and for sending your questions through.

I’ll just mention again that we are we are always looking to improve our education products, so if you can take the time to complete the survey we’d really appreciate it.

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