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Charities & Not-For-Profits Law in Australia

Legal Questions for Every Charity & Not-For-Profit Organisation | Issue 3: Privacy

Posted in Governance, Liability & Risk, Privacy

In our third issue of “Legal Questions for Every Charity and Not-For-Profit Organisation” we deal with the topic of Privacy. The update forms part of our series of short summaries of legal issues that we have noticed during the course of advising our clients are common and important to charities and not-for-profit (NFP) organisations.


Do you know whether your organisation is required to comply with the Privacy Act? Does your organisation have a compliant Privacy Policy and other measures in place to ensure compliance with privacy legislation?

Generally speaking, small businesses or not-for-profit organisations with a turnover of $3 million a year or less are exempt from having to comply with the “Australian Privacy Principles” under the Privacy Act and therefore are not required by law to have a privacy policy. However, there are a number of exceptions to this rule.

Even if you are not required to have a Privacy Policy, it is a good idea to have an up-to-date Privacy Policy in place, particularly if your organisation collects and uses personal information.

We recommend you consider the following:

Do you have a Privacy Policy? When was it last reviewed?

Does your policy accurately reflect how your organisation collects and uses personal information?

Is personal information safely and securely stored?

Is there someone in the organisation who can take on the role of a privacy officer, to deal with complaints and other privacy concerns from the public?

Please do not hesitate to contact us with any queries related to the Privacy Act or to discuss your Privacy Policy.

Bill d’Apice, Partner | +61 2 9233 9013 | wdapice@makdap.com.au
Belinda Marsh, Senior Associate | +61 2 9233 9083 | bmarsh@makdap.com.au

Legal Questions for Every Charity & Not-For-Profit Organisation | Issue 2: Charitable Tax Concessions

Posted in Tax Exemptions & DGR Status

As advised in Issue 1: Governance, during the course of advising charities and not-for-profit (NFP) organisations over many years, we have noticed some common issues that are important to our clients. Over the next few months, we will continue to run a series of short summaries of those legal issues that every charity and not-for-profit organisation should consider.

This month we will deal with the topic of charitable tax concessions.

Charities and some NFP organisations may be entitled to receive a range of Federal and State tax concessions. It is important that you are familiar with these so you can take advantage of them. This may enable your organisation to free up capital to spend on your charitable or NFP objectives.

If your organisation is a charity it must be registered with the ACNC in order to be eligible to be endorsed by the ATO for Federal tax concessions.

In order to make sure your organisation is registered and endorsed for all the tax concessions that it is entitled to we recommend you consider the following:

Have you checked which Commonwealth tax concessions your organisation is currently endorsed to receive?
Click here for the ABN lookup.

Is your organisation registered as a charity with the ACNC? If so, it may be eligible to be endorsed for:
* Income tax exemption
* Goods and Services Tax (GST) concessions
* Fringe Benefits Tax (FBT) rebate
We recommend that all charities seek the above tax concessions.

Is your charity or NFP entitled to be endorsed for Deductible Gift Recipient (DGR) status?
DGR status is not available to all registered charities, only some limited categories of charities and NFP organisations are eligible to be endorsed to offer DGR receipts to donors. This is a very sought after tax status that is worth investigating. Click here to view ATO’s DGR table.

If your charity or NFP is endorsed with DGR status, is it entitled to receive and registered for FBT exemptions?
We note these are more lucrative than the FBT rebate.

Is your charity or NFP entitled to receive State, Territory or local government tax concessions? 
These are in addition to Federal tax concessions and may include stamp duty (a tax paid on some financial and property transactions), payroll tax (a tax on wages which exceed a certain threshold), land tax, and rates concessions (for local government council rates).

Your charity or NFP organisation may also be entitled to receive other tax concessions so please do not hesitate to contact us with any queries related to tax concessions that you might have.

Trade Mark Protection – 5 Points Every Charity & Not-For-Profit Organisation Should Consider

Posted in Liability & Risk, Protection, Trade Marks

As a Charity and Not-For-Profit (NFP) you rely heavily on the goodwill and reputation of your organisation which could take years of effort and investment to build.  It is therefore crucial for you to protect your names and brands, and this can be achieved by way of trade mark protection.

A trade mark is a “badge of origin”.  It is a way of distinguishing one trader’s business, goods or services from another.  An organisation’s name could potentially be a trade mark, as could its logo or the names of their goods or services.

If you are thinking about registering a trade mark for your Charity or NFP, we recommend you consider the following five points.

1. Why register a trade mark in the first place? 

A registered trade mark grants the owner certain exclusive rights pursuant to the Trade Marks Act.  You can use the trade mark for the goods and services to which the mark is registered and potentially stop others from using your mark or a mark that is deceptively similar.  Your registered mark will also prevent others from registering an identical or deceptively similar name as a trade mark in the same classes of goods and services.   Furthermore, a registered trade mark is also a piece of valuable intellectual property that charities and NFPs can utilise, including licencing to third parties.

When you have registered a trade mark, you can legally attach the symbol “®” next to the mark, to show the public that it is a registered trade mark.

2. I already have a domain name and/or registered a business name, do I still need to register a trade mark?

Domain names and business names have nothing to do with trade marks and give no trade mark rights or protections.

It is not a legal requirement to register a mark or name as a trade mark.  Others are not allowed to use your business name as their own without your permission and this is known as “passing off”.  However, while it is possible to protect your brand without registering the mark as a trade mark, it is often more difficult and expensive in the long run to run a passing off claim against third parties.

3. What should I register as a trade mark?

It is recommended that the name and logo associated with the name of your organisation should be registered as separate trade marks.  The trade mark of the name would be a word mark, whereas the logo would be an image mark, that would likely have distinctive graphics or symbols, layout and usually also the name of the organisation.

If your organisation operates ongoing services, recurrent events or produces certain goods with a distinctive brand or name, and you wishes for such brands to be protected, we recommended that you register the names and logos of such brands as trade marks.  For example, “CEO Sleepout”, being the name of a well known annual fundraising event to assist the homeless, is a registered trade mark owned by St Vincent de Paul Society National Council of Australia Inc.

4. Can my mark(s) be registered?

For a mark to be registered as a trade mark, it has to be “capable of distinguishing”, which means the mark has to be capable of distinguishing your goods and services from those of another trader.  Distinctive names, such as those containing made-up words (e.g. “Google”), portmanteaus (e.g. “Citibank”) or words that don’t relate to the goods or services (e.g. “Apple” for computer products), are easier to register as trade marks as they are capable of distinguishing the goods and services to which the name relate.

On the other hand, descriptive names would have a harder time being registered as a trade mark.  A name that is very descriptive of a good or service, for example, the name “Diabetes Awareness Fundraiser” as the name for a diabetes awareness fundraising event, is not distinctive and would have a hard time being registered as a trade mark.

When IP Australia examines a trade mark application, if it determines that the mark is not capable of distinguishing (or if there are any other issues, such as being too similar to an existing registered trade mark), it will issue an adverse report identifying the problems.  If the issues raised in the report are not overcome then the application will lapse and the mark will not be registered.

If your organisation is in the process of creating the brand for a new service or product, or it wishes to rebrand, we recommend that you consider obtaining legal advice before committing to a new name or logo, to see whether there may be any trade mark issues associated with registering the marks.

5. How do I register a trade mark?

Registration is carried out through IP Australia.  An application for trade mark is submitted to IP Australia along with the associated application fee.  An examiner will consider the application and either issue an adverse report if he or she determines that there is one or more issues with the application or else accept the application.  The accepted mark will be advertised for 2 months and if no opposition to registration is received from the public, then the mark can be registered once a registration fee is paid.

From 10 October 2016, there will be changes to the fee structure, with an increase to application fees payable but the removal of the registration fee.

It is important to get the application right, as once an application is submitted, it generally cannot be varied.  If a mistake is made, the process needs to be restarted and extra fees may need to be paid.

Given their reliance on goodwill and reputation, charities and NFPs should strongly consider protecting their brands through trade mark registration.  In the process of registering a trade mark, legal advice should be obtained to ensure that trade mark applications are drafted properly and they cover the right classes of trade mark.  Legal advice should also be obtained to deal with any adverse reports issued by IP Australia during the application process.

Top 7 Procurement Tips for Charities and Not-for-Profit Organisations

Posted in Liability & Risk, Procurement

Procurement decisions are made by charities and not-for-profits regularly and can be the source of problems and expense if you don’t get the decisions right.

It’s important that you don’t think that suppliers won’t look to enforce their agreement just because you are a charity or a Not-for–Profit association.

Procurement has its pitfalls and you need to avoid a situation where you might sign up in haste and repent at leisure.

Money wasted on bad procurement decisions means money off the table for your association’s purposes.

We recommend the following tips to avoid problems:

1. Scope of works

Check carefully what it is that you want the supplier to supply and then make sure that the contract covers it. This sounds simple but is often the cause of problems.

2.  Capacity

Make sure that the supplier can deliver the services you want. Confirm the supplier’s capacity to deliver by way of references or sector reputation.

3. Escalation of fees

Check carefully to ensure that there is no automatic escalation of fees which may make the contract onerous in future. Some suppliers will offer discounts over the first year to entice you with significant increases in later years.

4. Exit arrangements

Make sure that you have the capacity to terminate the agreement on reasonable notice without penalty where possible.

5. Automatic renewals

Check carefully to see that the contract does not contain automatic rollover provisions where you may not want them. If there are automatic rollover provisions, make sure that you have capacity to terminate without cause.

6. Test pricing

Undertake a comparative analysis to ensure that you will be getting good value for the services the contractor will provide.

7. Get advice

The big print giveth and the small print taketh away. Make sure that you get advice to ensure that you understand all of your contractual obligations and entitlements.

Please don’t hesitate to contact Bill d’Apice or any one of the lawyers in our Charities & Not-for-Profit team should you require any advice or assistance.

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

Legal Questions for Every Charity & Not-For-Profit Organisation | Issue 1: Governance

Posted in Governance

During the course of advising charities and not-for-profit organisations over many years, we have noticed some common issues that are important to our clients.

Over the next few months, we will run a series of short summaries of those legal issues that every charity and not-for-profit organisation should consider.

This month we will deal with the topic of governance.

It is important that your organisation is well managed so it can focus on its mission and purpose. We recommend you consider the following:

Do you have a governing document (e.g. constitution) that aligns with your activities? Charities registered with ACNC could risk losing the charitable status (and tax concessions) if they undertake activities that do not fit within the stated objects in their governing document.

When was the last time you reviewed your governing document? It is useful to review your constitution periodically to ensure compliance and appropriate governance arrangements, and if your organisation is registered with the ACNC is the most recent version of your constitution uploaded onto the ACNC Register?

Are processes for appointment or election of directors and office bearers clear?

Is there a maximum term for directors to promote some turnover on the Board?

Have you identified what skills are required for your directors and whether these must be taken into account when appointing or electing directors?

Does the Board receive presentations on governance and regulatory issues?

Does the Board have appropriate committee structures?

Are reports from management to the Board appropriate? Are directors informed about key financial issues?

Is there a strategic plan in place? If so, does management report to the Board on performance against the key items in the strategic plan?

Does your constitution contain appropriate winding up provisions and, if your organisation is a DGR, does it contain appropriate provisions for surplus DGR funds if DGR endorsement is revoked?

Do you have a dispute resolution mechanism and is this appropriate for your needs?

Do you have an appropriate and effective mechanism for disclosing conflicts of interest?

What internal systems do you have, to manage and prevent fraud? Are these adequate? 

Please do not hesitate to contact us for any advice regarding best practice, meeting governance standards and managing board conflicts.

Bill d’Apice, Partner | +61 2 9233 9013 | wdapice@makdap.com.au
Anna Lewis, Associate | +61 2 9233 9031 | alewis@makdap.com.au

New NSW Associations Laws to Commence 1 September 2016

Posted in Compliance, General, Governance, Liability & Risk

New NSW Associations Laws to Commence on 1 September 2016

Important amendments to the Associations Incorporation Act 2009 (NSW) and the Associations Incorporation Regulation 2016 (NSW) will commence on 1 September 2016.

These amendments will affect both existing Associations and the registration process for new Associations in NSW.

The following summary highlights the key changes:

  • The Model Rules (constitution) has been amended and updated.
    • NOTE: these changes will take effect automatically from 1 September 2016 and will apply to all Associations which have adopted the model rules.
    • Associations can refer to the Summary of changes to the model constitution for further information about the main changes to the model constitution.
  •  Constitution
    • An Association may adopt the model rules or prepare their own constitution. If the Association chooses to prepare their own constitution, certain matters must be included, notably:
      • The maximum number of consecutive terms of office for any office bearers on the committee;
      • Whether ballots can be lodged via postal or electronic means; and
      • The winding up of the Association.
    • If the Association’s constitution does not include clauses relating to the above points, then the relevant provision in the model constitution relating to that matter will automatically apply.
    • Any constitution prepared by the Association can include additional matters; however, they must be consistent with the Act.
  • Official address
    • The Association’s official address must now be located within NSW.
    • Each time the public officer changes or the official address changes, the public officer is required to notify NSW Fair Trading.
    • The official address cannot be a post office box.
  • Duty of Care and Diligence
    • The changes require that it is the duty of each committee member to carry out their duties for the benefit of the Association so far as practicable and with due care and diligence.
  • Personal liability
    • The Act now has a protection from personal liability for committee members who act in good faith when undertaking their role.
  • Financial records
    • Associations must keep financial records and minutes in either electronic (which is convertible into hard copy) or hard copy form.
    • Financial records must be kept for at least 5 years.
  • Fees
    • A new fee structure has been implemented and the new fee Schedule is available on the Fair Trading website.
    • Any association wishing to update its constitution as a result of the amendments to the legislation will not be required to pay a fee to register the change for a period of 12 months until 1 September 2017.

Next Steps

We recommend that you review the constitution of your Association as a matter of urgency to determine the impact of the above changes. For a summary of changes to the model constitution, click here.

Should you have any concerns or queries please do not hesitate to contact Anna Lewis or Bill d’Apice of Makinson d’Apice Lawyers for assistance.

The ACNC is here to stay!

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

Following two years of speculation regarding the future of the charity regulator, earlier today the Minister for Social Services, Christian Porter confirmed that the Federal Government has decided to keep the Australian Charities and Not-for Profits Commission (ACNC).

The Liberal Government was elected on a platform to abolish the ACNC and a Bill to abolish the regulator was introduced to the House of Representatives in March 2014. The Bill was never passed and whilst the ACNC continue to forge ahead with its operations, the uncertainty of the ACNC’s future remained.

Kelly O’Dwyer, the Minister for Small Business and Assistance Treasurer this morning confirmed that “the government will continue to work with the ACNC, states and territories and the sector to identify areas where we can reduce the burden of red tape for charities and Not for Profit organisations”.

It is hoped that this announcement will allow the ACNC to progress regulatory reform, particularly in relation to cutting red tape and unnecessary regulatory burdens and will hopefully result in a closer working relationship with the States and Territories, many of whom have been cautious to work with the ACNC.

We recommend that charities continue to comply with their current obligations including submitting their Annual Information Statement, notifying the ACNC if you are listed on the register of missing charities, and notifying the ACNC if you wish to withhold information from the online register.

Should you have any questions in relation to the ACNC or any other matters please do not hesitate to contact Bill d’Apice or Anna Lewis in our office.

ABR and ACNC enter into a data sharing agreement

Posted in Compliance, General, Governance

In a further step to provide a user-friendly and reliable source of data for the community, last week the Australian Business Register (ABR) and Australian Charities and Not for Profits Commission (ACNC) entered into a Memorandum of Understanding (MOU) to facilitate data sharing between the two agencies.

Occasionally, there are data discrepancies between the two registers which can create frustration, confusion and an unnecessary administrative burden on registered charities, particularly because a number of registered charities (not all) are only required to notify the ACNC of changes such as change of entity name.

Certain data sets will be shared on a weekly basis and a six monthly data match report will be conducted.

The MOU specifically sets out:

  • the data the ABR and the ACNC will provide each other,
  • the arrangements under which the data is provided, and
  • how inconsistencies between the two registers are resolved,

and is available here

The ACNC Commissioner Ms Susan Pascoe noted “this is a significant step forward” and we look forward to the streamlining of administration this will produce for charities.

If you would like more information in relation to the above or any other charity related matters please do not hesitate to contact Bill d’Apice or Anna Lewis of our office on 02 9233 7788.

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.

Template Governing Document Released by the ACNC

Posted in Compliance, Fundraising, General, Governance

Last week the ACNC released a one page document to be used as a template governing document for registered charities who otherwise don’t have a constitution which satisfies the requirements of the ACNC.

This template governing document is for charities which are created by an Act of Parliament or are governed by  Canon Law and allows these entities to provide a link to where their governing documents are located.

In accordance with section 40-5 (1)(a)(vii) of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act), the Commissioner is to retain a register (known as the Australian Charities and Not-for-profits Register) in which the Commissioner includes information in respect of each registered entity including its governing rules. Thus, a charity is required to publicly provide a governing document.

Furthermore, in accordance with Governance Standard 1 (contained in the ACNC Regulations) charities are required to show that they are not-for-profit and work towards a charitable purpose. The ACNC website states that this can be done by “including [their] charitable purpose and a rule requiring them to operate as a not-for profit in their governing document… Once your governing documents appear on the ACNC Register you will be considered to [meet] this standard.” Accordingly, the template governing document for registered charities that are established under an Act of Parliament or are governed by  Canon Law is a useful tool in demonstrating the ACNC’s flexibility for accepting alternate sources of governing rules which may not ordinarily be considered as meeting the necessary requirements.

We recommend that any charity who has not already submitted their governing document to the ACNC ensure that the relevant governing document/s are uploaded to the ACNC Register.

Should you have any questions in relation to the ACNC Register or any other matters please do not hesitate to contact Bill d’Apice  or Anna Lewis in our office.