Supporting and Building Capacity in Australia’s Charity Sector Murray Baird Assistant Commissioner General Counsel

Objects 02/06/13 The NFP Sector pressed for objects to be set out up front in the ACNC Act: The objects of this Act are: (a) to maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector; and (b) to support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector; and (c) to promote the reduction of unnecessary regulatory obligations on the Australian not-for-profit sector.

WHAT THE ACNC DOES Registers new charities Maintains a charity register Regulate charities (reporting and compliance) Provides advice, guidance and education Reduces red tape for charities

Charity registration To register with the ACNC, a charity must: Be not-for-profit Have a charitable purpose Comply with ACNC Governance Standards Not have any disqualifying purposes Not be an individual, political party or government entity 1 2 3 4 To be eligible to be registered as a charity with the ACNC, an organisation must be able to show that it is a ‘charity’. In other words it must: be not-for-profit have only charitable purposes that are for the public benefit be complying with ACNC governance standards not have any disqualifying purposes ( for example engaging in, or promoting activities that are unlawful or contrary to public policy or promote or oppose a political party or candidate for political office), not be an individual, political party or government entity, and have an Australian Business Number (ABN) with the right ‘entity type’. At this point in time, the ACNC does not register not-for-profits who are not also charities. 5 All charities are not-for-profit, but not all not-for-profits are charities.

1 7 2 8 3 9 4 10 5 11 6 12 12 Charitable Purposes Human rights Advancing health 7 Human rights 2 Advancing education 8 Security/safety 3 Advancing social/ public welfare 9 Animal welfare 4 Advancing religion 10 Advancing environment 5 Advancing culture 11 Advocacy 6 Reconciliation, mutual respect and tolerance 12 Other purposes

Word Investments 2008 An institution can be charitable where its only activity is to engage in commercial activities and direct the profit to other charitable institutions

Hunger Project 2014 Charity does not relieve hunger other than through fundraising Involvement is concrete as part of a chain of organisations that relieve hunger

OBLIGATIONS TO THE ACNC Maintain ongoing entitlement to registration Notify the ACNC of certain changes Keep records Report each year via the Annual Information Statement Comply with the 5 governance standards

Registration is Voluntary Commonwealth exemptions and concessions; Income tax, FBT,GST,CGT, franking credits Exemptions under other Commonwealth arrangements – copyright, discrimination, consumer protection, do not call, SPAM etc PRESENTATION TITLE | DATE

30.07.2010 54,835 charities australiancharities.acnc.gov.au

PRESENTATION TITLE | DATE

Red tape reduction work Commissioning research to inform initiatives Sharing charity information Streamline reporting arrangements Harmonising state and territory regulatory requirements Heavily regulated sector reporting solutions We’re actively working with states/territories and Commonwealth agencies on initiatives to streamline and harmonise reporting with the ACNC. Charity Passport – enables government agencies to easily access charity data. The aim: to unlock volunteer and staff time to work on charities’ core activities. The ACNC’s ‘red tape reduction’ work includes: commissioning research on red tape reduction in the not-for-profit sector to inform red tape reduction initiatives (they have been two significant pieces of research EY and Deloitte), and sharing charity information with other government agencies to build a ‘report once, use often’ framework for charities using the ACNC Charity Passport streamlining reporting arrangements for charities with other Commonwealth regulators harmonising ACNC and state and territory regulatory requirements for charities registered under state and territory laws (for example a number of states including WA have aligned their incorporated association requirements to align to the ACNC in terms of size and reporting requirements)

ACNC Compliance approach The ACNC believes that most charities want to do the right thing. Our first focus is on helping charities to meet their obligations through guidance, education and support. We aim to work collaboratively with charities to address concerns and resolve issues. However, the ACNC acts swiftly and firmly in cases of serious misconduct, persistent non-compliance, or gross negligence. We know that most charities are doing the right thing or are trying very hard to do the right thing. We are conscious that majority of charities (67%) are small in size. Many of these organisation may be run by volunteers and the regulatory frameworks can be at times complex. Whenever possible we work with charities to address non-compliance, provide education and guidance and get the charity back on track. However, when the failures are so significant or the charity is not willing to work with the ACNC we will act swiftly and firmly.

Let a thousand flowers bloom and see what flourishes 02/06/13

Transparency Advocacy Integrity Overheads Tax Deductibility Current Issues Transparency Advocacy Integrity Overheads Tax Deductibility

How do we respond? Presumption of choice Harper says that human services markets work best when consumers are informed and engaged, empowering them to make good decisions. Consumers should have access to data to better inform decisions. Is transparency good? One of the recurrent complaints about the reporting and publication regime of ACNC is that people are not discerning or intelligent enough to understand the data. The argument runs that charities ought not to have to provide information because it may be misused. Media may create league tables. Charities may be judged solely on administrative overhead ratios. It is no one else’s business how we run this charity. In my biased position, I think that the advantages of access to data outweigh the perils. We have seen from recent inquiries into the conduct of charities that mischief tends to flourish in the dark and sunlight is the best antiseptic. But whatever your views on that question, we are now in a world where data is democratised. Accessible and interpretable by the user. The astute board will ensure that it tells its story so the data makes sense. If your overheads are higher, explain why.

Advocacy – What’s OK have a purpose of advancing public debate – including promoting or opposing a change in law – where this furthers or aids another charitable purpose. have a purpose to promote or oppose a change to a law, policy or practice in the Commonwealth, a state or territory or another country where this furthers or aids another charitable purpose

Advocacy what’s not ok have a purpose to promote or oppose a political party or a candidate for political office. •have a purpose to engage in or promote activities that are unlawful. •have a purpose to engage in or promote activities that are contrary to public policy (which, in this context, means the rule of law, our constitutional system, the safety of the public or national security).

PRESENTATION TITLE | DATE

Outcomes not outputs “When I choose a doctor I want to know about survival rates, not overheads”

Tax Deductibility 54,000 charities 28,000 DGRs To encourage donations for delivery of public benefit. 54,000 charities 28,000 DGRs 47 general categories of DGR 4 registers OAGDS, Harm Prevention; REO; ROCO

Thank you! Questions?

Stay in touch acnc.gov.au advice@acnc.gov.au facebook.com/acnc.gov.au 02/06/13 acnc.gov.au 13 ACNC (13 22 62) 9.00am – 6.00pm AEST advice@acnc.gov.au facebook.com/acnc.gov.au @acnc_gov_au Aussie Charities and NFPs