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Members Regulations

ACNC discussion

4 min read
ACNC regualtes the Australian charity sector

The leaders

  • David Crosbie, CEO of Community Council for Australia and Member of the Not-for-Profit Sector Reform Council
  • Cassandra Goldie, CEO of the Australian Council of Social Services
  • Melanie Raymond, Chair of the Board of Directors for Youth Projects, Chair of the Not-for-Profit Advisory Committee at the Australian Institute of Company Directors.

Do you feel the Australian charities and not-for-profit commission (ACNC) will adequately reflect NFP’s needs?

Crosbie: I think the sector needs to be careful in over-stating both the role and scope of the ACNC. If we can establish a responsive regulator that can reduce red tape and increase our knowledge of the sector, it will be a major step forward.

Eventually the ACNC will become a more responsive regulator for the sector and is likely to adequately reflect the needs of not-for-profits (NFPs). However, in the short-term the ACNC has to establish a very accurate, up-to-date register of over 50,000 charitable organisations, have the information searchable online, encourage others to use the information they have collected and be able to consider new applications for charitable status.

If this is all up and running in the next few years, it will be a major achievement and the ACNC will have fulfilled a number of immediate needs of NFPs and others interested in the sector. Over time we may want to push the ACNC to be engaged with the sector in other ways but I think that is quite a few years away.

Where do you stand on the implementation of a statutory definition of charity?

Crosbie: The objective of the new statutory definition is to clarify charitable status at the same time as the new regulator is being established. This is a good thing, but like most in the sector, I would still like to see a degree of consistency and common sense applied in the way the ACNC goes about determining charitable status. A one size fits all approach is not going to work in terms of defining charity.

In your opinion, what does the success of the new regulations depend on?

Crosbie: The legislation to establish the ACNC enables it to operate – nothing more. The real test of the ACNC will be in the way it actually operates and whether it can successfully achieve the three objectives of the enabling bills. This means the success of the ACNC rests on its day-to-day work, rather than the legally established parameters of its enabling powers. The other key to success will be the sector’s responsibility in holding the ACNC to account – the sector can and should take some responsibility for the success of the new regulator.

Do you believe Australia’s NFP sector needs to be more tightly regulated?

Goldie: The Australian Council of Social Services (ACOSS) has long maintained that our sector is overly but ineffectively regulated. For all the reporting that charities do on their operations, there is a lot of unnecessary duplication. The challenge is to ensure appropriate levels of accountability for the sector’s activities without diverting unreasonable levels of resources away from the people and communities they should be assisting.

What are the advantages and disadvantages of registering with the ACNC?

Goldie: ACOSS has raised significant concerns about the initial proposal for the ACNC and advocated some major changes, including narrowing the scope of the ACNC legislation, which was initially too broad in our view; improving the proportionality of the punitive powers of the ACNC, both in terms of the charitable sector and in comparison to other regulatory frameworks; ensuring the independence of the ACNC Commissioner, the Commissioner’s line of report and the ACNC’s budgetary allocation; improving the reporting requirements to the ACNC for charities and other NFPs; and seeking transparent and accountable commitments from Commonwealth agencies that they will accept those reports rather than seeking their own.

The immediate advantages will come for organisations engaged in funding relationships with Commonwealth agencies, where the ‘report once, use often’ approach will first be implemented. For ACNC-registered charities, a Commonwealth agency must use the information provided by the ACNC in the first instance, before seeking anything additional from the charity. Further reforms recently agreed to by the Government will also place the onus on Commonwealth agencies to check that they are seeking additional information for a reasonable purpose, not just because it’s been their practice to date.

What is your opinion on the reporting requirements of the ACNC?

Goldie: Some of the most significant benefits of the ACNC will come from harmonisation of regulatory reporting processes nationally. We have heard from a few organisations arguing that these requirements are higher than they currently face, but it’s hard to imagine a harmonisation process that avoided such a change entirely. Our hope is that the benefits of the national system will be evident in a reduced reporting burden and a better availability and quality of information about the sector overall.

Are you looking forward to the implementation of the ACNC?

Raymond: The promise of ‘red tape reduction’ is attractive given the layers of reporting that exist at present and the difficulties some NFPs face in compliance.
A helpful and informed body specialising on the needs of the sector, such as the ACNC, would be a bonus and many people have felt that the Australian Taxation Office is not an appropriate body to determine charitable status. Registration data will form a Charity Passport with common data available across government but we need to see more detail on other aspects such as external governance standards and how these interact with other legislation to be more certain of the impact.

What is the biggest challenge that NFPs will face with regards to the ACNC over the coming year?

Raymond: NFPs who are registered charities will come under the new reporting period from 1 July 2013. Working closely with our CEOs, we may need to adjust our board calendars and, for some, the overhaul of data collection will be a matter of priority. Clear guidance will be needed on how to report administrative and fundraising costs. I am not opposed to transparency but concerned about how we can communicate the fact that these costs are a natural part of the work of a NFP.

What is your opinion on the Federal Government’s long-term plan to expand the range of NFP entities registered with the ACNC?

Raymond: A staged approach is correct. Let’s wait and see how it rolls out. The sector is so impressive in its diversity and resilience so the scale of the task is daunting to contemplate. A strong case will need to be made to demonstrate the reasons and benefits, and the barriers charities have experienced will need to be addressed first. I think if the sector is required to comply to standards that prove more complex or difficult there is an onus on the government to finance the capacity building required, especially for smaller NFPS. I hope expansion does not cause distraction, fatigue or loss of nerve and spirit in those brilliant, smaller NFPs working quietly to deliver a mandate within their communities.

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