Annual report showcases ACNC achievements
Progress in improving the data of Australia's first free, national publicly-available charity register and helping to free charities from unnecessary reporting burdens are among the significant achievements reported in the national charity regulator's annual report. The ACNC regulates approximately 60,000 Australian charities that are eligible for Commonwealth tax concessions.
The commission's legislative objectives include maintaining and enhancing public trust and confidence in the sector, supporting and sustaining it and promoting the reduction of unnecessary regulatory obligations.
The recently released Australian Bureau of Statistics Satellite Account revealed that in 2012-13 the charity and not-for-profit sector contributed almost $58 billion (4 per cent of the GDP). It is growing at a rate of 6 per cent a year and employs just over a million Australians. The account also revealed that charities and not-for-profits held $176 billion of assets and received income of $107.5 billion.
Charities receive billions of dollars of tax concessions from both state and federal governments as well as direct financial support from millions of donors.
Among the ACNC's highlights and achievements were:
- Improving the national register by including advanced-search techniques and identifying and removing hundreds of inactive charities;
- Registering 3141 new charities;
- Launching a charity 'passport' to reduce red tape (It provides government agencies with ACNC information.);
- Launching the self-service charity portal, which reduces paperwork and allows charities to update their information online;Taking over maintenance and updating of the National
- Standard Chart of Accounts, which provides a common approach to capturing accounting information.
Provision of housing by charities – an interpretation
The ACNC has published a Commissioner's Interpretation Statement (CIS) on the 'Provision of housing by charities'. Its purpose is to provide guidance on the application of charity law to housing providers.
The statement addresses the following issues:
- What charitable purposes may be fulfilled through the provision of housing?
- To whom can charitable housing be provided?
- What kinds of housing can be deemed charitable?
- How does commercial activity fit with the provision of charitable housing?
- What kind of interaction can occur between government and charitable-housing providers?
Other CISs concern:
The Hunger Project Case, which provides guidance to ACNC staff, charities and the public on the application of the law as set out in Commissioner of Taxation v Hunger Project Australia  FCAFC 69;
Indigenous charities, which provides guidance to ACNC staff on how charity law applies to indigenous charities, including the recognition of indigenous disadvantage and applying a public-interest test.
The commission has also issued for public discussion a draft of a Commissioner's Interpretation Statement on health-promotion charities. The draft aims to provide guidance on the meaning and scope of 'health-promotion charities' (HPCs). Comments are sought by 15 February 2015.
CISs provide guidance to ACNC staff, charities and the public on how the ACNC understands the law that applies to charities. The statements are binding on ACNC staff.
While the ACNC does not have the power to produce binding rulings in the same way as the ATO's tax rulings, it will ensure that organisations that rely on the Interpretation Statements are treated fairly, consistent with objectives and regulations. If the law or statement changes, the ACNC will apply the new position from the date of the change, not retrospectively in a way that could disadvantage a charity. In most cases, the ACNC will also allow time for charities to respond to changes.
Completing your 2014 AIS
The ACNC will, for the first time, make financial information from Australia's registered charities available to the public free of charge. An estimated 35,000 charities report on a standard financial year (1 July to 30 June); 8000 voluntary financial statements were lodged for 30 June 2012.
As part of the 2014 Annual Information Statement (AIS), all charities except for basic religious charities and those registered with the Office of the Registrar of Indigenous Corporations (ORIC) are required to provide financial information.
Financial statements, which are required for medium and large charities, and financial information that charities provide as part of their 2014 AIS, will be published on the ACNC register at acnc.gov.au/findacharity.
The ACNC has begun contacting charities to offer guidance and support. If charities using a standard financial year do not hear from the ACNC by early December, they are encouraged to log into their portals (charity.acnc.gov.au) to check their contact details.
Charities are able to submit their 2014 AIS and financial reports online at charity.acnc.gov.au. By reporting online, they will benefit from having their 2013 information already entered. This should save significant time and effort. Guidance on 2014 AIS is available at acnc.gov.au/2014ais.
Some tips for submitting your 2014 AIS
For all charities
1. Update/upload your responsible persons' details and governing documents.
2. Refer to the 2014 AIS guide, which includes definitions of all the financial terms mentioned in the AIS. The guide is available at acnc.gov.au/2014ais.
3. Refer to your charity's financial records when filling in the financial questions.
For medium and large charities
1. The financial information in your 2014 AIS should match the financial report that you lodge.
2. Check transitional arrangements to see if you are able to upload financial reports you have already submitted to a state or territory regulator.
3. If you are a medium charity ensure that you attach a review or audit report of your financial report.
4. If you are a large charity ensure that you attach an audit report with your financial report.
The ACNC has published the following templates, which help charities complete their 2014 requirements:
- Transitional financial report template – large charity: The template includes financial information questions in the 2014 AIS and notes to take to an auditor either to review or audit;
- Transitional financial report template – medium charity: The template includes financial information questions in the 2014 AIS and notes to take to an auditor either to review or audit;
- Responsible entities declaration: A declaration to be signed by the responsible people of the charity under section 60.15 of the ACNC regulation 2013;
- Audit and review reports templates: These templates are designed for auditors.
Public documents approved wording
Charities may use the following wording on public documents (such as letterhead, emails and websites) to demonstrate their registration with the ACNC: "[insert charity name] is registered as a charity with the Australian Charities and Not-for-profits Commission ABN [insert 11 digit ABN]". Note that a registered charity cannot use the ACNC logo.
Factsheet published to help charities operating overseas
The ACNC has published a factsheet advising overseas-aid and development charities on matters such as how to register with the ACNC, their ongoing obligations, the risks of operating overseas and links to external resources.
Overseas-aid and development organisations – those with overseas beneficiaries or activities, or that send money overseas – are able to apply to become a registered charity. There are, however, conditions that must be met in applying for registration. Organisations must:
- Fit the legal meaning of charity;
- Have an Australian Business Number (ABN);
- Meet the ACNC's minimum governance standards;
- Must not engage in or support terrorist or other criminal activities.
Don't donate to non-registered charities
The ACNC is reminding donors to check its register before donating.
Concerns have been raised about both the nature of Melbourne-based Voithame Tin Ellada (VTE) and the intended use of funds donated to it. The commission has confirmed that VTE is not listed on its register and reminded donors that it was always a good idea to check the register before donating.
Some media have raised concerns about the 'Mothers and Children Fundraiser for Syria'. The ACNC has confirmed that the organisation is not a registered charity.
The register is available at acnc.gov.au/findacharity
Donors can also take other steps to ensure that they are giving to legitimate charities. They should ask for identification from door-to-door and street-based charity collectors, be wary of online requests for donations (be mindful of suspicious emails and links), and ask for tax receipts, which should show a charity's details, including an ABN. Donors should provide credit-card details only to trusted sources and research online and in annual reports how charities use their donations.
If you think that a charity collector is suspicious, or you receive an email you're not sure about, contact the charity to let it know.
For more information on safe giving, visit acnc.gov.au or call 13 ACNC (13 22 62). The Australian Competition and Consumer Commission also has useful information about safe giving. Visit accc.gov.au
Hundreds complain about charities
The ACNC has received 639 complaints about charities in 12 months to 30 June 2014.
The regulator's 'advice services' resolved almost 400. Others were assessed by compliance services, 42 needing a formal review or investigation.
In 2013-14, the commission revoked a charity's status after an investigation had determined that its purpose was not solely charitable. It issued a warning and a direction to another charity during the year.
Most concerns about charities fell into three categories: governance (48 per cent) fraudulent or criminal activity (24 per cent), and private benefit (28 per cent). Ninety per cent of complaints came from the public, government agencies contributed 8 per cent, and 'other' 2 per cent.
Four breaches of the ACNC Act stood out in 2013–14:
- Inappropriate use of charitable funds: The most common problem was charities using funds inappropriately – in ways that did not comply with their NFP purposes. For example, charitable funds that were used to purchase private assets for 'responsible' persons;
- Lack of accountability to members: In several cases there was a lack of accountability to members. Charities failed to convene meetings as required in their constitutions or they failed to follow the appropriate processes to amend constitutions;
- Responsible persons failing in their duties: Several 'responsible' persons failed to declare conflicts of interest, did not maintain accurate records or allowed a charity to operate while insolvent;
- Involvement with criminal activity: Employee theft had occurred due to a charity's governance failures.
Raising a concern about a registered charity
The ACNC assumes honesty in regulating charities. Most people involved with charities are, indeed, honest, act in good faith and try to do the right thing. When concerns are raised about charities, the ACNC takes them seriously.
Since the ACNC was established, it has received more than 900 concerns and complaints, resulting in more than 400 formal investigations. Investigations have led to the protection of $68 million in charitable funds.
The commission has simplified the process by which the public and the charity sector can raise concerns. They may visit acnc.gov.au/charityconcern, complete 'Form 6A: Raise a concern with a charity' and email the completed form to email@example.com.
The commission details the kind of complaints and concerns it can act on.
Once the ACNC receives a completed form, it will send a confirmation email outlining what will happen next and privacy restrictions under the ACNC Act. To find out more or to raise a concern, visit acnc.gov.au/charityconcern.
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