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Charities & Not-For-Profits Law in Australia

Red Tape Relief for NSW Associations

Posted in acnc, charities, Compliance, Fundraising, Not-For-Profits, regulations

With effect from 1 October 2018, associations incorporated under the Associations Incorporation Act 2009 (NSW) which are registered charities will no longer have to submit annual financial reports to NSW Fair Trading as well as the Australian Charities & Not-for-profits Commission (ACNC).

The annual financial reports which these charities lodge with the ACNC will be securely shared with NSW Fair Trading and will be accepted for the purposes of complying with the NSW legislative requirements.

This new arrangement is welcomed as it will cut some more red tape for NSW charities who are also incorporated associations and it will bring NSW into line with Victoria, South Australia, Tasmania and the ACT.

It would be of even greater assistance for all State and Territory Governments to adopt the Federal definition of a charity under the Charities Act 2013 (Cwth) and to accept registration with the ACNC as evidence of charity status for the purposes of local legislation.

Should you require any advice in relation to this, please do not hesitate to contact our office.

Bill d’Apice, Partner | +61 2 9233 9013 | wdapice@makdap.com.au

Belinda Marsh, Senior Associate | +61 2 9233 9083 | bmarsh@makdap.com.au

External Conduct Standards for Charities

Posted in acnc, charities, Compliance, General, Governance, Liability & Risk, regulations, Treasury

The ACNC legislation passed in 2012 allowed for the creation of minimum external conduct standards that are required to be met by registered charities.

To date, this issue seems to have been in the government’s too hard tray but Treasury has now issued draft external conduct standards and is seeking submissions on them.

The draft regulations are intended to be a principles based set of minimum standards of conduct, governance and behaviour that ACNC-registered charities must comply with when operating outside Australia. There is no exception for basic religious charities (unlike the exception that exists for basic religious charities in respect of governance standards).

Details of the draft external conduct standards can be found at the Treasury website. And interested parties can submit responses up until 21 September 2018. In addition, Treasury is proposing to hold meetings with interested parties and should you wish to be involved you can express your interest via email to externalconductstandards@treasury.gov.au by 17 August 2018.

We expect that these external conduct standards may have some significant practical implications for charities operating outside Australia. We recommend that you carefully review these to see whether they will have any implications for your charity and, if so, whether it would be appropriate to lodge a submission.

Treasury seems to be focusing on the activities of charities and other NFPs operating or controlled outside Australia with the release of a draft ruling on the “In Australia” requirements in July 2018.

Should you have any questions or should we be able to assist please don’t hesitate to contact Bill d’Apice of our office.

New Draft Tax Ruling – Fringe Benefits Tax

Posted in FBT, Fringe Benefits Tax

On 11 July 2018, the ATO published draft Tax Ruling TR 2018/D2 – Fringe benefits tax: benefits provided to religious practitioners.

The public is invited to provide feedback to TR 2018/D2 until 24 August 2018.

On the same date TR 2018/D2 was published, the ATO’s previous Tax Ruling on this topic – TR 92/17 – which was published in 1992 was withdrawn.

Since 1992, there have been numerous changes to both the law and to the nature of contemporary religious practice – the most significant of which is the establishment of the Australian Charities and Not-for-profits Commission (ACNC) in 2012.

The establishment of the ACNC means that determining whether an entity is a religious institution is now as simple as checking whether it has been registered as a charity with an “advancing religion” sub-type.

TR 2018/D2 contains a number of examples of contemporary real life scenarios to help understand whether benefits provided to religious practitioners are in respect of their pastoral duties or for directly related religious activities and therefore exempt from fringe benefits tax.

Although TR 2018/D2 is still in draft Ruling, the ATO has advised that it may be relied upon to the extent that if a person underpays tax as a result of them relying upon the
Ruling, they will still have to pay the correct amount of tax once known but will not have to pay any interest or penalties that would otherwise be applicable.

Please don’t hesitate to contact us if you would like to discuss the draft Ruling or its application to you or if you would like any help submitting feedback to the draft Ruling.

Church Administration Handbook – Second Edition

Posted in charities, Not-For-Profits

The Second Edition of the Church Administration Handbook is now available to purchase online.
The handbook outlines how the complex institution that is the Catholic Church in the modern world
is structured and functions.

Written by experts in ecclesiastical and civil law, the Church Administration Handbook is an invaluable resource for:

  • managers of the church’s temporal affairs
  • administrative staff in parishes, schools, hospitals and other church institutions
  • members of finance councils and boards
  • seminarians and others preparing for leadership roles in the church
  • professional advisers to church bodies, civil lawyers and accountants
  • journalists and members  of the media who write about the church.

About the Authors:
Fr Brian Lucas is the National Director of Catholic Mission (the Pontifical Mission Societies in Australia).
Fr Peter Slack is Parish Priest of St Mary’s Parish, Casino, in the Diocese of Lismore.
Mr Bill d’Apice is our firm’s chairman of partners and has experience acting as an adviser to
the Australian Catholic Bishops Conference, various dioceses and religious congregations.

Order the Church Administration Handbook (2nd Edition) online at www.stpauls.com.au for $49.95.

ACNC’s compliance and enforcement activities in 2017

Posted in charities, Compliance, Governance, Liability & Risk, Not-For-Profits, Protection

The ACNC has released a report that examines its compliance and enforcement activities in 2017.

The report also outlines the ACNC’s compliance focus for the year ahead.

Download the report at ACNC’s website: https://lnkd.in/gXDEUDm

Privacy – The Notifiable Data Breaches Scheme Commences Today

Posted in Compliance, General, Governance, Liability & Risk, Privacy, Protection

Amendments to the Privacy Act introducing the Notifiable Data Breaches (NDB) scheme commences today, 22 February 2018.

The NDB scheme will apply to all organisations currently required to take steps to secure personal information, including but not limited to businesses and not-for-profit organisations with an annual turnover of $3 million, health service providers, TFN recipients etc.

If your organisation is currently required to secure personal information under the Privacy Act, including compliance with the Australian Privacy Principles under the Act, it will need to comply with the NDB scheme on and from 22 February 2018.

The NDB scheme applies to data breaches of personal information likely to result in serious harm to individuals affected.  Consider the following three questions when assessing a data breach:

  1. Is there an unauthorised access to or unauthorised disclosure of personal information, or a loss of personal information that your organisation holds?
  2. Is this likely to result in serious harm to one or more individuals?
  3. Was your organisation not able to prevent the likely risk of serious harm with remedial action?

If the answer is “yes” to all of the above, then a notifiable data breach has occurred.

If a notifiable data breach has occurred you need to notify the effected individual(s) and the Office of the Australian Information Commissioner.  Significant legal penalties of up to $1.8 million could apply for not complying with the NDB scheme.

What your organisation should do:

  • Understand the requirements of the NDB scheme. There are resources and guidelines available on the OAIC website.
  • Carry out an audit of your organisation from a privacy perspective. Consider asking yourself questions such as:
    * Does your staff understand your organisation’s obligations in respect of privacy and do you have an adequate policy in place?
    * How are you securing personal information and what might need to be done to better secure such information?
    * Where are the vulnerabilities in your organisation that could lead to a data breach?
  • Have a data breach response plan drafted and tailored to the needs of your organisation and the personal information it holds.
  • Train your staff as to the requirements of NDB scheme and your organisation’s data response plan.

Should you require any further information or specific advice in relation to the NDB scheme or if you have any other privacy-related questions, please do not hesitate to contact our office.

Bill d’Apice recognised in the Chambers & Partners 2018 edition

Posted in Compliance, Fundraising, General, Governance, Liability & Risk, Privacy, Procurement, Protection, Tax Exemptions & DGR Status, Trade Marks

Bill d’Apice, Chairman and Partner, has been recognised in Chambers and Partners’ Asia Pacific 2018 edition as a Band 1 lawyer in the area of Charities.

This is a well-deserved acknowledgement and recognition of Bill’s dedication to the Charity sector over many decades.

From the Chambers Asia-Pacific guide: 

“Bill d’Apice of Makinson & d’Apice in Sydney “has been in this space a long time” and “is definitely an expert,” according to market sources. He possesses particularly focused expertise on the ways in which charity and not-for-profit law impacts on ecclesiastical organisations, having represented the Australian Catholic Bishops’ Conference and a wide range of bodies at archdiocesan, diocesan and individual congregation level for a number of years.”   

Click here to view the 2018 Chambers and Partners guide.

Changes to Retirement Villages Regulation in NSW

Posted in General, Governance

The Retirement Villages Regulation 2009 NSW will be automatically repealed on 1 September 2017.

There has been a consultation process underway which has now been finalised and a new Regulation will come into force on and from 1 September 2017. Operators and residents should familiarise themselves with these changes.

The major changes that are proposed are as follows:

•  clarifying that repainting of external surfaces once every 10 years is capital maintenance;
•  requiring copies of a village’s insurance policy documents to be available to residents;
•  a new “average resident comparison figure” in the disclosure statement to facilitate more effective comparison between villages;
•  reducing the maximum amount payable for an operator’s legal and other expenses to $50.00;
•  adding new matters for which village rules can be created, including smoking in communal areas;
•  requiring clearer information in annual budgets around head office expenses;
•  lowering the maximum amount allocated for contingencies to $1.00;
•  prohibiting additional matters that cannot be financed by recurrent charges;
•  simplifying the process for allowing residents to hold office on a residents committee for longer than 3 years; and
•  allowing service of documents by electronic means.

We recommend that you familiarise yourselves with the draft Regulation.

The Regulatory Impact Statement may be helpful to you in understanding the proposed changes.

However, should you require any advice in relation to them, please do not hesitate to contact our office.

Bill d’Apice, Partner | +61 2 9233 9013 | wdapice@makdap.com.au

Remunerating Charity Board Members

Posted in Compliance, Fundraising, Governance

The ACNC have recently released an information paper ‘Remunerating Charity Board Members‘ for charities considering paying board members for their services as a board member.

The term ‘board members’ is used throughout the information paper to generically refer to the responsible persons of a charity, such as committee members, directors or Trustees.

The ACNC have confirmed that it is permissible for charities registered with the ACNC to pay their board, provided that the payments are:

– in furtherance of the charity’s charitable purpose;

– permitted under the charity’s governing document; and

– properly authorised within the charity.

The information paper provides a range of reasons why a charity may or may not choose to remunerate its board which may be valuable for charities considering this issue.

The Importance of Transparency

The ACNC suggest that charities which choose to remunerate board members should have a clear policy in place outlining how remuneration is determined, the process of approval, and how the charity will address any concerns or disputes of board remuneration.

The ACNC has also highlighted the importance of transparency for board remuneration and that stakeholders should be given the opportunity to raise any concerns about these payments. Charities are reminded that this responsibility is found within ACNC Governance Standard 2 – Accountability to Members and are encouraged to familiarise themselves with these obligations.

Medium and large sized charities are reminded that they must disclose the remuneration for key management personnel (such as board members) in accordance with the Australian Accounting Standards Board Related Party Disclosures Standard (AASB 124) in their Annual Information Statement lodged with the ACNC.

If your charity is considering remunerating its board members please do not hesitate to contact us for further information.

Bill d’Apice, Partner | +61 2 9233 9013 | wdapice@makdap.com.au

Crowdfunding and Charities

Posted in Fundraising, Governance

Crowdfunding has become a very popular method of online fundraising for charities and not‑for‑profits.

It generally involves an organisation setting a fundraising target online and then asking those on the internet (the crowd) for donations to reach that target.

The ACNC has issued some information for charities and donors about the use of crowdfunding.  In particular, they advise charities and not-for-profits to:

  • do their homework
  • carefully consider the terms, conditions and fees
  • be aware of the law in relation to fundraising which is different in each State and Territory
  • remember that charities cannot outsource their responsibilities

In addition, ACNC provides the following advice for intending donors:

  • not all crowdfunding campaigns come from registered charities
  • give wisely

We recommend that you review the ACNC’s Charities and Crowdfunding Guide in the event that you intend to be involved in setting up a campaign or making a significant donation to a charity through crowdfunding sources.  The Australian Taxation Office has also issued some guidance on the tax implications of crowdfunding.

If you have any questions please do not hesitate to contact our office.

Bill d’Apice, Partner | +61 2 9233 9013 | wdapice@makdap.com.au