Despite a series of firsts, the charitable sector might still end up second

It has been a whirlwind two and a half years since the government first announced a scoping study to develop a national regulator for the not-for-profit (NFP) sector. Acting on a recommendation of the Productivity Commission, the consultation was not the first time something like this had been proposed.

Throughout the previous 15 reviews over the past 18 years, a consistent theme emerged – the regulation of the NFP sector would be significantly improved by establishing a national regulatory body to unify and simplify regulatory and taxation measures.

Milestones

The establishment of the Australian Charities and Not-for-profits Commission (ACNC) in December 2012 marked the first milestone in achieving this goal. Other major achievements include the ACNC Register, which enabled the public to access information on charities for the first time.

Sourced from registration information, financial statements and annual information statement (AIS), the ACNC Register is a credible information source. From one point, the public is now able examine the range of work being undertaken by Australia’s 57,000 charities, which has never been possible before.

With the inception of charity governance standards and financial reporting requirements, and the statute of a definition of charity, there are only a few pieces of the regulatory reform puzzle left to complete. Referral of powers to regulate all associations and incorporated organisations nationally is still a key component that needs to be addressed. Once in place, the regulation and education of the entire NFP sector will be achieved.

The threat

If the Coalition’s policy on NFP reform is to progress, the proposed dismantle of the ACNC as a regulatory body and the reforms that have been set in place will undoubtedly set the sector back.

The Coalition’s policy is centred on its belief of the sector’s need, with the presumption being that the ACNC extends the arm of government into the civil sector creating more red-tape for NFPs. The Coalition suggests that the ACNC is a mechanism for a more regulated society; they claim that their position is a reflection of the sector’s views on the reform process.

Continuing the current dual regulatory regime with state and territory-based associations’ legislation co-existing with the national regulation of charities is not ideal as it forces the NFP sector to continue being subject to a high level of compliance.

The hopeful future

However, if the reform process continues to progress there will be greater societal insight into the value the sector adds to the Australian economy and society, with the ACNC Register being a research tool and valuable information source. If progress continues in its current form, NFPs can for the first time be regulated like first class citizens.