The Australian Charities and Not-for-Profits Commission (ACNC) have ‘Governance Standards’ that are set out in the Australian Charities and Not-for-profits Commission Regulation 2013. These ‘Governance Standards’ contain minimum standards registered charities need to comply with to ensure they operate in a lawful, accountable and responsible way.
The Federal Treasury is proposing to change the ‘Governance Standards’ through the Australian Charities and Not-for-profits Commission Amendment (2021 Measures No. 2) Regulations 2021 (Proposed Changes). The effect of the Proposed Changes is to expand the scope of activities that registered charities must not engage in or promote others to engage in and address uncertainty about when engaging in or promoting certain kinds of unlawful activity may affect an entity’s entitlement to registration under the Act.
A failure to meet the ‘Governance Standards under the Proposed Changes may lead to the registration of the charity being revoked and losing charity tax concessions.
The Proposed Changes aim to expand the scope of Governance Standard 3 by adding that registered charities are also not entitled to remain registered with the ACNC if they:
- do an act (or omit to do an act) that may be dealt with as a summary offence under an Australian law relating to real property, personal property or causing personal injury or harm to an individual; or
- fail to take reasonable steps to ensure its resources are not used to promote acts (or omissions) by any entity that may be dealt with as an indictable offence, a relevant summary offence, or a civil penalty of 60 penalty units or more.
According to the Explanatory Statement, offences that will be covered by the proposed additions to Governance Standard 3 include:
- unlawful gathering or remaining on land or in a building;
- malicious damage, vandalism or theft of personal property; and
- common assault or threatening violence against an individual.
It is therefore critical that authorised officers of registered charities develop an understanding of the relevant summary offences and ensure that the charity has appropriate policies, controls, reviews and audits in place to monitor compliance.
The Proposed Changes also seek to introduce Governance Standard 6 to require registered charities to take reasonable steps to join the National Redress Scheme for Institutional Child Sexual Abuse (Redress Scheme) if the charity is, or is likely to be, identified as being involved in the abuse of an applicant for redress under the Redress Scheme.
The Redress Scheme was established in response to the Royal Commission into Institutional Responses to Child Sexual Abuse. The Redress Scheme provides support to survivors of institutional child sexual abuse, including by providing them with:
- a redress payment of up to $150,000;
- counselling and psychological care; and
- an optional direct personal response from the responsible participating institution.
A failure to participate in the Redress Scheme could also lead to the registration status of the charity being revoked.
If you want to know more about the proposed expansion of Governance Standard 3, please get in touch with our friendly lawyers.