Australian Charities and Notfor-profits Commission –
What’s in store at the one stop
shop?
Murray Baird
Assistant Commissioner General Counsel
Australian Charities and Not-for Profits Commission
Uniting Church in Australia
Queensland Synod
April 2013
The Churchwardens’ complaint…
“[the Trustees] have omitted
to distribute, yeld and deliver
unto the poore, sicke and
nedye paryshyoners of the
said poore paryshes… and
the poore prysoners in
Newgate… eight shillings.. to
be bestowed in good newe
and sweete bread”
Sir Nicholas Bacon Lord Keeper
1558–1579
An Act to reforme Deceits and Breaches of Trust 1597
“[Charitable Funds] have
bene…most unlawfully
and most uncharitably
converted to the lucre
and gayne of some few
greedy and covetous
persons contrary to the
true intent and meaning
of the givers…”
Elizabeth I 1533 –1603
Charitable Uses Act 1601
“Commissions to inquire
into any breach of trust,
falsity, non employment,
concealment, misgovernance or
conversion of charitable
funds”
The Milkmaid Vermeer 1658
An Australian Charities Commission
a new independent
statutory agency, the
Australian Charities and
Not-for-profits
Commission (ACNC), by
1 July 2012 and related
structural changes
required to the Australian
Taxation Office
Federal Budget May 2011
Dedicated and focused regulator
“The lack of an
independent national
regulator with a
dedicated focus on the
needs of the sector has
hindered more
streamlined regulation
across Australia.”
Assistant Treasurer David
Bradbury Second Reading
speech 23 August 2012
Need for reform - Slow Train Coming
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2001 Definition of Charities
2008 Disclosure Regimes for Charities
and NFP Organisations
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2010 Productivity Commission :
Contribution of the Not-for Profit Sector
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2010
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2010 Henry Review
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2010 Senate Economic Legislation
National Compact
Committee inquiry
Scope of the Sector
• 600,000 not-for-profit
groups
• 60,000 charities
(welfare, education,
religion and other
recognised charities)
• 4% of GDP/$43b.
• 7.8% growth p.a.
• One million
employees – 8% of
employees
• 4.6m volunteers
Charity sector: Who is in?
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Welfare and disability;
(Non Government) Schools, Universities etc;
Churches, Religious organisations
Conservation, Arts, Childcare, Community
infrastructure
What will ACNC Do?
Registration
Compliance
Education and guidance
Information
Trust
Maintain, protect and
enhance public trust
and confidence in the
Australian not-for-profit
sector.
ACNC object 1:
Maintain, protect and enhance public trust and
confidence in the Australian not-for-profit sector
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56,000 charities from ATO register of tax concession charities
Online charity registration – 100% take-up
240 new charities registered with the ACNC
Average registration time: 8.3 days
75 complaints / concerns about charities received by ACNC
Advice Services
Basic ACNC Register established –50,000 visits
Increased public awareness of the ACNC Register
80,000 visitors to website
The ACNC Register
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free, online, public register of ACNC registered
charities at acnc.gov.au.
Initial information on the ACNC Register includes the
charity’s:
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legal name
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Australian Business Number (ABN), which links to
their record on ABN Lookup. This record includes
basic information such as the types of tax
concessions your organisation receives and whether
it has the deductible gift recipient (DGR) status
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state or territory of registration.
– continued…
The ACNC Register
In future, the ACNC Register will also list:
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business address and contact details
the type of charity it is registered as
registration date
responsible person details (including names and positions)
a copy of the governing rules
the annual information statements provided to the ACNC,
including financial reports and audit reports if the charity is
medium or large and therefore required to provide these
enforcement action taken by the ACNC (such as warnings,
directions, or removal of director)
The ACNC Register
Health
Support and sustain a
robust, vibrant,
independent and
innovative Australian
not-for-profit sector
ACNC object 2
Support and sustain a robust, vibrant, independent
and innovative Australian not-for-profit sector
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13 ACNC open for 12 hours on weekdays
(8 am to 8 pm AEDST)
• 2000+ calls answered in 11 seconds (on average)
• Enquiries: 457 emails, 159 written queries and
13 faxes responded to in 1 day (on average)
• acnc.gov.au 44,877 visits
On our website:
• Factsheets
• Guide to the ACNC Act in plain language
• Detailed guides, quick tips, frequently asked questions.
How the ACNC can help your charity?
Cut Red Tape
Reduction of
unnecessary regulatory
obligations on the Sector
ACNC object 3.
Promote the reduction of unnecessary regulatory
obligations on the sector
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ACNC Reporting and Red Tape Reduction Directorate
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ACNC Chair Reducing Regulatory NFP Duplication
Working Party with the DPC
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Data Standardisation – adoption of the National Standard
Chart of Accounts (NSCOA) and alignment with Standard
Business Reporting (SBR)
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Charity Passport – progressively implemented from July
2014 - ACNC collect data from registration and AIS and
provide to authorised Cwlth agencies = key element of
report-once, use often.
Progress in red tape reduction continued
• Streamlined Reporting Working Groups across Cwlth
(eg DEEWR, ISCA, ACARA, NCEC for non-govt schools)
• Commonwealth Grant Guidelines have been
amended to improve and simplify interactions around
grants between the Government and the sector
• Working with other regulators (eg ASIC and ORIC) to
remove or minimise duplication
• Collaborating with State and Territory government
agencies to minimise duplicated regulatory obligations
wherever possible (eg SA)
• Annual Report to Parliament to map progress in
achieving meaningful red-tape reduction for charities.
Registered Charities:
Obligations to the ACNC
The situation at 3 December 2012
56,000
On 2 Dec 2012, 56,000
charities automatically
registered with ACNC
ACNC
ATO
Applicant
for charity
From 3 Dec 2012
orgs apply to
ACNC for charity
status
From 3 Dec 2012
ATO applies tax
law only
Obligations to the ACNC
To maintain ACNC registration, all registered
charities need to:
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notify us of certain changes, such as:
– service address, legal name, governing body
members, governing rules
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keep records
– financial records, operational records
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report to us each year
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meet governance and external conduct
standards from 1 July 2013.
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Some exemptions for basic religious charities and
non-government schools.
Reporting Obligations to the ACNC
Obligations vary depending on the charity’s size
• Small charities do not need to provide as much
information as medium or large charities.
A charities size is determined by its annual
revenue
• small – annual revenue less than $250 000
• medium – annual revenue between $250 000
and $1 million
• large – annual revenue is $1 million or more.
Reporting to the ACNC
Annual information statement (AIS)
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All registered charities have to submit an annual information
statement
The AIS will be brief and cover information that charities already
know, such as:
– how the charity works towards its charitable purpose
– the number of volunteers and paid staff
– the type of people (or animals!) who benefit from the
charity's activities.
Where we already have information we will
pre-populate the AIS
The first AIS is due six months after the 2012–13 reporting
period (for most this will be December 2013)
Regulatory approach
• Light-touch, risk-based, evidence-based approach
• Provide information, guidance and education
• Use graduated powers, provide opportunity for selfcorrection
• Regulatory Principles: relevance, proportionality,
consistency, transparency, timeliness
• Currently finalising our regulatory approach, following
public consultations
Deregistration
Graduated Sanctions
Investigation
Assistance
Guidance
More work to be done
• Governance Standards now in
Regulations subject to
disallowance. Effective 1 July
2014.
• Financial Reporting
Requirements – consultation
closed 15 February 2013.
Regulations not yet published
• External Conduct Standards
to be released for consultation
and regulations
Five Governance Standards
• Purposes and character of an NFP entity
• Accountability to members
• Compliance with Australian laws
• Suitability of responsible entities
• Duties of responsible entities
Basic Religious Charities
• Registered entity
• Advancement of religion
• No other sub-type (eg Education, Relief of
Poverty);
• Not Association or Corporation
• No funds >250K revenue;
• No government grants >100K
• No grouping
Benefits of BRCs
• No Governance Standards
• No financial reports
ACNC Mailout
Staged mailout to 56,000 charities previously
registered with the ATO
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First quarter 2013
Form to capture information from you in one interaction
The form is also available online as a fillable pdf
Information we receive will help us update the ACNC
Register
• Bulk lodgement process
• Please call us if you do not receive the letter
Three Hotspots
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Unregistered charities for advancement of
religion
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Funds operated by entities
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Part PBI/HPC
Who came across to ACNC Register?
Schedule 1 ACNC (C&T) Act 2013
• If endorsed as TCC with ATO 2 December 2013, you are
automatically registered
• 1.1 Endorsed Charities automatically became registered
charities
• 1.2 Self Assessing Religious Institutions did not come
across
• Therefore, not registered charities and no longer entitled
to tax exemption unless…
The Remedy
Schedule 1 ACNC (C&T) Act 2013
• If a self assessing entity for advancement of
religion notifies ACNC within 12 months that it
was a charity 2 December 2012, it will be
registered as a charity from 3 December 2012.
• Otherwise, need to apply and there may be a
gap in exemption.
Funds operated by entities
Tax Exemption ITAA 1997
The old provision
The new provision
• S.30-B Table of recipients for
deductible gifts
• Examples: School Building
funds, Scholarship Funds,
Necessitous Circumstances
Funds, Library Funds etc
• 30-17 requirements to deduct
a gift you make to a fund;
• No requirement to have a
separate ABN or be a charity
• Fund must be a registered
charity
• Do you need to apply for
ACNC registration for each
fund?
The Inquiry
• Seeking view of ATO as to whether it will require
the fund to be a separate entity or if sufficient that
a Registered charity operates the fund
• Watch this space.
Part PBI or HPC
The old arrangement
• Public benevolent institution
could be contained within the
structure and governance of
another entity
• For example, a church
denomination could have a
welfare department
• To demonstrate “institution”,
needed to show quarantine of
operations and deductible
gifts
The new arrangement
• Treat the parent as if it didn’t
have a PBI/HPC and retain its
ABN;
• Treat the PBI/HPC as a
separate entity and within 12
months have a new ABN
• ACNC will register PBI/HPC
as a separate entity in its
appropriate subtype and
deem registration from 3
December 2012
Charities Bill 2013 - New definition of Charity
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Not for profit
Charitable purposes for the public benefit
Ancillary purposes in aid of charitable
No disqualifying purposes
Not individual, political or government
See draft Bill and Draft EM – consultation until 3 May
Charitable Purpose
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Advancing health;
Advancing education;
Advancing social or public welfare;
Advancing religion;
Advancing culture;
Promoting reconciliation/mutual respect/tolerance;
Human rights;
safety of general public;
Suffering of animals;
natural environment;
Analogous purposes;
Change or opposing change in the law to to aid the
above purposes
Finding out more: www.acnc.gov.au
Providing you with access to information is a priority for us
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Weekly Commissioner Column (sent to 6,193 subscribers)
Media alerts and releases and newsflashes
Aboriginal Liaison officers
podcasts and videos – coming soon
Phone: 13 ACNC (13 22 62) 8 am to 8 pm AEDST
Email: advice@acnc.gov.au
Social media:
facebook.com/acnc.gov.au
twitter.com/acnc_gov_au
youtube.com/ACNCvideos
Questions