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Charities & Not-For-Profits Law in Australia

Charity Sector Update

Posted in Compliance, Fundraising, General, Governance, Tax Exemptions & DGR Status

Future of the ACNC slowly becomes more certain

Earlier this month, the (then) Minister for Social Services Scott Morrison stated that “there is very strong support for the Australian Charities and Not-for-profits Commission (ACNC) and I don’t believe there would be any support in the Senate for there to be any change.” Many in the sector were quick to applaude the Government on its committment to retaining the ACNC, however, Senator Morrison stopped short of committing to the ACNC in its current form and suggested he would look at shifting the ACNC’s focus away from operating as a regulator and towards being a “champion of the sector”.

With the recent change of Prime Minister, and a new look cabinet, the largely unknown Hon Christian Porter MP has been appointed as the new Minister for Social Services. It is unclear whether Minister Porter has particular views on the role and future of the ACNC, and has just taken paternity leave for the birth of his first child so is unlikely to be making any policy announcements in the short term. Whilst Minister Morrison’s statement was a step towards greater certainty for the ACNC in some form or another, the sector is still waiting for a clear decision in relation to the future role of the ACNC.  For the time being the sector will have to continue to wait for the Government to form a clearer view on the future of the ACNC.

Overseas Aid Gift Deduction Scheme Review

Obtaining Deductible Gift Recipient (DGR) endorsement as an overseas aid fund under the Overseas Aid Gift Deduction Scheme (OAGDS) is notoriously difficult, complicated and time consuming. For this reason, the Department of Foreign Affairs and Trade is conducting a review of the OAGDS guidelines and processes in order to make the OAGDS guidelines and processes clearer, simpler and more robust, while reflecting current international development practice and standards.

Findings from round table discussions and written submissions were collated in June and the key findings are available on the DFAT OAGDS review website.

Some of DFATs key findings are:

  • The time-consuming and highly resource-intensive OAGDS process is disproportionate to the risk of organisations working overseas;
  • The OAGDS has too much red tape and should consider working more closely with the ACNC and Australian Taxation Office;
  • The current guidelines maintain good standards but are too prescriptive; and
  • The definitions and guidance on welfare, development and relief in the current guidelines should be reconsidered.

The summary of findings from the submissions and roundtables will be used to inform revisions to OAGDS guidelines and processes, with the aim of launching revised guidelines in late 2015.

We will continue to keep you informed of developments as they occur.

NSW Charitable Fundraising Conditions Updated

As of 1 July 2015, NSW Fair Trading assumed responsibility for administering the Charitable Fundraising Act (NSW) 1991, which outlines how a charity can legally undertake fundraising activities.

The Charitable Fundraising Regulation 2015 commenced on 1 September 2015. The new Regulation includes a number of amendments, including new exemptions for certain charities, and has been informed by stakeholders’ submissions lodged as part of the Regulatory Impact Statement (RIS) process, which concluded on 24 June 2015. For example, licensed fundraisers in NSW will now only need to have their financial reports audited if they have annual revenue of $250,000 or more (in line with ACNC reporting). Previously it was $100,000. Additionally, the threshold applying to charities that will be exempt from obtaining a fundraising authority has been increased from $10,000 to $15,000, to align with a similar exemption that applies in the Australian Capital Territory. The ACNC Commissioner, Susan Pascoe, welcomed the changes.

Minor amendments were also made to the Charitable Fundraising Authority Conditions which were approved by the Minister for Innovation and Better Regulation on 31 July 2015. These conditions will now apply to new fundraising authorities issued by NSW Fair Trading from 1 September 2015.

Charities in NSW should familiarise themselves with the new Regulation and Fundraising Authority Conditions.

Fundraising continues to be a hotly debated topic, as was recently reinforced at the Australian Charity Law Association (ACLA) conference last month where Bill d’Apice chaired a discussion panel on fundraising regulation. For a number of years many have hoped for fundraising reform, however the States and Territories do not seem to have an appetite for this issue and changes continue to be made in an ad hoc manner.

Useful Resources for Charities

The ATO has recently published three very useful guides for NFP administrators:

  1. Induction package – to introduce not-for-profit administrators to the information and services the ATO has to assist you, and contains an overview of NFP tax issues;
  2. Handover package – use this checklist to hand over your organisation’s tax affairs to the new administrator; and
  3. Self-governance checklist – helps you review your organisation’s status as an NFP organisation, and check how well your organisation understands its tax and super obligations.

Additionally, to assist with the upcoming AGM reporting season, the ANC has produced an annual report template which also includes draft notice, agenda and minutes.

We recommend taking a look at these resources as they are very well prepared and may assist your organisation.

Should you have any questions in relation to the items above or any other matters please do not hesitate to contact Bill d’Apice or Anna Lewis of our office on 02 9233 7788.