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.

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.

The ATO has released the Draft Special Conditions Ruling TR 2014/D5 – Income Tax: special conditions for various entities whose ordinary and statutory income is exempt

 

 

 

 

 

In August the ATO released draft ruling TR 2014/D5 regarding the proposed application of special conditions inserted by the Tax Laws Amendment (2013 Measures No. 2) Act 2013.
The special conditions require that:
  • An entity must comply with all the substantive requirements in its governing rules (Governing Rules Condition); and
  • An entity must apply its income and assets solely for the purpose for which the entity is established (Income and Assets Condition).

What organisations or entities does the ruling apply to?

The ruling applies to a number of income tax exempt entities (but not all) which are listed at Section 50 of the Income Tax Assessment Act 1997 (ITAA).

Continue Reading ATO releases Draft Special Conditions TR2014/D5


The Future of the ACNC Remains Uncertain

On 16 June 2014 the Senate Committee delivered a divided report on the Australian Charities and Not-for-profit Commission (Repeal) (No 1) Bill 2014 (No 1 Bill).

No 1 Bill

Unsurprisingly, the Liberal Senators supported the abolition of the ACNC, however, the Labor and Greens Senators offered dissenting reports appealing for the ACNC to continue. The dissenting reports noted that the ACNC is preferable to returning to the previous regime of regulation by the ATO and ASIC.

The No 1 Bill was introduced into the House of Representatives on 19 March and now will return to the House of Representatives where it is likely to be passed by the lower house. Part 1 of the Bill contains the necessary provisions to repeal the ACNC and Part 2 provides for transitional arrangements, importantly, allowing for the Minister to specify a successor agency.

If passed, the Bill won’t come into operation until the Australian Charities and Not-for-Profits Commission (Repeal) Bill (No 2) (which has not yet been introduced) is successfully passed.

Continue Reading The Future of the ACNC Remains Uncertain

https://www.charitiesnfplaw.com.au/files/2014/06/Detective-with-magnifying-glass.jpg

The ACNC has recently released a register of charities that have not responded to communication from the regulator (i.e. no known address/contact details or correspondence has been returned to sender). Charities on this database risk losing their entitlements to charity tax concessions and have until 30 June 2014 to update their details and contact the ACNC. If these charities do not contact the ACNC, the ACNC will commence the process of revoking their registration as charities. If a charity’s registration with the ACNC is revoked it will not be entitled to charity tax concessions from the ATO.

Continue Reading Missing charities could lose tax concessions

Starting a Not-For-Profit or Charitable Organisation

Are you thinking about starting an organisation, charity, club, association, social enterprise, co-operative or some other kind of not-for-profit group? If so, this information may be helpful.

What’s the Difference between a Charity and a Not-For-Profit?

Continue Reading Starting a Charity or Not-for-Profit

Government Introduces Legislation to Repeal the ACNC

This morning the Coalition Government introduced a suite of legislation to repeal thousands of Acts, Bills and Regulations in an effort to “cut red tape”.

In line with the Government’s pre-election promise, the planned abolition of the ACNC has been tabled as part of the Australian Charities and Not-for-profits Commission (Repeal) (No. 1) Bill 2014 (the Bill). The Explanatory memorandum to the Bill states “the abolition of the ACNC is part of the broader Government red tape reduction and deregulation agendas.”

The proposed abolition of the ACNC is intended to occur through a two stage process; the initial Bill to repeal the ACNC has been introduced to Parliament but (if it is passed) will not take effect until a subsequent Bill regarding replacement arrangements is introduced in the winter sitting period.

Continue Reading Government to Repeal the ACNC

AbolishmentThe Coalition Government has stated that it will seek to abolish the ACNC along with more than 8000 federal laws on 19 March as part of its plan to reduce red tape. This confirms the Government’s pre-election commitment to abolish the ACNC.

Although Minister Andrews has said that the ACNC would be replaced by a National Centre for Excellence “as a fount of both innovation and advocacy” there is still much uncertainty regarding the scope and operation of this Centre. Minister Kevin Andrews has suggested that an evaluation model based on the US Charity Navigator could replace the educative and registry functions of the ACNC. This model is best known for its comparative lists of charities such as 10 super-sized charities, 10 consistently low rated charities, 10 charities overpaying their fundraisers and so on. Much debate regarding the merits of a system which ranks charities has followed and without further clarity regarding the Centre’s objectives, purpose and scope to collect data such a proposal is difficult to assess.

Continue Reading Abolition of the ACNC Takes Shape

ACNCACNC Deadline Approaching

Have you submitted your 2013 Annual Information Statement?

Regardless of size or purpose all charities registered with the ACNC must submit an Annual Information Statement to the Commissioner each year. The first AIS will need to be completed for the 2012-2013 financial year. If your charity has a financial year calendar (ending 30 June), its first Annual Information Statement (AIS) is due on 31 March 2014.

Continue Reading ACNC Annual Information Statement Deadline Approaching