Highlights of 2013-14
Registering charities for the first time
The ACNC’s Charity Register is the first of its kind in Australia, although similar registers exist in most developed countries across the world. The digital age has predisposed us to expect immediate access to information on our phones, tablets or laptops. We often won’t book a hotel, buy insurance or purchase electrical goods without seeing what comparison websites say. Yet, if you wanted to find out what charities there were in your town or suburb, to find information on individual organisations, or even know how many charities there were in Australia, this was not previously possible.
Now with the Charity Register we have a national database, containing a range of verified information on registered charities. Anyone can look up free of charge, detailed information about each registered charity - including their activities, administration, objectives and the people in the community whom they serve. This valuable information helps donors, funders and the wider community support charities with confidence. We have seen the public adopt the Register as a key information source with more than 303 000 views of the Register over the financial year - equivalent to roughly 830 daily searches of the Register.
In July 2013 we made advanced search functionality available on the Register, allowing the public to search for charities based on specific criteria. We also launched a mobile version of the Register putting the power of knowledge in the hands of every potential donor who has a mobile device by giving them easy access to information on registered charities.
This year was the first in which Australian charities reported to the ACNC, lodging Annual Information Statements for the 2012-13 year. In preparation, we worked with sector bodies to develop a reporting process which was not onerous and only requested information that charities would have readily to hand. It is a testament to these efforts, and to the dedication of the sector, that 40 000 charities submitted their 2013 Annual Information Statement before the 30 June 2014 deadline. As well as the Annual Information Statements, the Register contains the governing documents of more than 25 000 charities and 7 000 sets of accounts. If the ACNC is to continue (see ACNC Repeal Bill below), the financial details of all charities (other than Basic Religious Charities and withholding arrangements) covering the 2013-14 reporting period will be published. Most charities submitted their Annual Information Statement online using the ACNC Charity Portal. We launched the self-service Charity Portal in November 2013 to reduce the burden of paperwork on the sector and to allow charities to update their public information quickly and easily online. Charities can log in to the Charity Portal at any time to make basic changes to their information quickly and securely without filling in paper forms or without having to pick up the phone. The Charity Portal has been received well by the sector, receiving more than 1.5 million views throughout the year.
Freeing charities from red tape
For far too long, charities have had to tolerate a fragmented, inconsistent and inadequate regulatory framework. This is extremely complex for people to manoeuvre, is highly duplicative and cannot provide the public with the assurance they require. The ACNC has begun the process to reform this. The South Australian government has consulted on an exposure draft which proposes changes to the law covering incorporated associations and charitable collections to harmonise reporting, and to allow charities to collect donations in South Australia once they have registered with the ACNC. The Australian Capital Territory government has also committed to harmonisation of reporting and charity regulation, and is waiting for further clarification of the ACNC’s future before proceeding.
We recognise that these are only steps and there is a long journey ahead, but we know that further progress will be possible if the ACNC continues. Without a national regulator and a Charity Register, the sector will operate in a regulatory regime that the business community would never tolerate, and that six major parliamentary and independent inquiries over the last two decades have shown to be wholly inadequate.
During the reporting period the ACNC has played a catalytic role in driving further opportunities to reduce red tape across government by setting up sub-sector working parties and forums. With uncertainty regarding the ACNC’s future, the work of these groups was disbanded. However, other foundational work has been pursued. In December a red tape reduction forum involving government, sector, professional advisers and academics yielded 17 recommendations for red tape reduction grouped into five themes: national approach; risk; outcomes; funding agreements and reporting; and sector capacity. It is hoped that the ground-breaking work of the ACNC in furtherance of its red tape reduction object will not be lost due to policy uncertainty.
Creating a ‘report once, use often’ framework
Charities often have to provide the same information time and time again to different government agencies. This is because government often works in vertical silos and doesn’t share this information, or because they have privacy provisions that make this impossible. It is for this very reason that the Australian Parliament gave the ACNC the objective of reducing unnecessary regulatory duplication. To address this, the ACNC launched the Charity Passport in June 2014 - the key to the ACNC’s ‘report once, use often’ framework. The Charity Passport allows for information collected by the ACNC to be provided to other government agencies, eliminating the need for charities to repeatedly provide the same information to different bodies. The Charity Passport can be of particular value in reducing duplication associated with government grants and supports the new Commonwealth Grant Rules and Guidelines (effective from 1 July 2014). Under the guidelines, Commonwealth agencies must have regard to information collected and made available by regulators such as the ACNC and should not seek this information from grant recipients. While some departments have been slow or reluctant to take up the Charity Passport because of the uncertainty of the ACNC’s future and the Government’s proposal to archive the Charity Register, the Attorney General’s Department has signed on to use the Charity Passport. The ACNC will continue to promote how the Charity Passport removes unnecessary red tape for charities and government agencies.
Helping standardise Australia’s charity accounts
Reducing the regulatory burden on charities remains a priority for the ACNC. From June 2013, the ACNC took carriage of the ongoing maintenance and updating of the National Standard Chart of Accounts (NSCOA), an initiative of the Queensland University of Technology. NSCOA provides a common approach to capturing accounting information for use by not-for-profits and government. The Australian, state and territory governments agreed, through the Council of Australian Governments, to accept NSCOA for all reporting purposes. NSCOA, and the ACNC’s stewardship of it, has made a significant contribution to red tape reduction.
Clarifying the legal definition of charity
For the sector, the introduction of the Charities Act 2013 (Cth) on 1 January 2014 saw the legal meaning of a charity clearly defined and accessible. It recognises charitable purposes such as the protection of human rights and the promotion of reconciliation and tolerance, and that many modern charities advance causes through prevention, advocacy, research and awareness-raising. We updated our registration process to enable charities to accurately record their operation on the Charity Register under the new subtypes introduced within the Charities Act. Over the coming months we will work with charities to ensure that their records in the Charity Register reflect the newly defined charitable purposes which they will be able to select through the Charity Portal.
Regulating the activities of charities
An important means of maintaining and enhancing public trust and confidence in charities is setting the foundations of the regulatory environment: communicating the regulatory and reporting obligations of charities, monitoring compliance, and responding to concerns raised about individual charities. The public want to know that their complaints and concerns will be taken seriously and that the ACNC has the powers to intervene in serious wrongdoing. This annual report illustrates that, overwhelmingly, charities do the right thing, but that there is a small minority involved in serious mischief.
As watchdog for the sector the ACNC has worked with other Australian and state and territory agencies. We share information and co-operate with intelligence and enforcement bodies to ensure that improper activity is identified and eliminated and that the reputation of the majority who do the right thing is protected. The ACNC, like charity regulators in other countries, has an important role to contribute to Australia’s efforts to combat money-laundering and the financing of terrorist activity. The establishment of the ACNC has contributed to Australia’s partial compliance with its international obligations under the Financial Action Task Force.
Learning from other charity regulators worldwide
The ACNC had the honour of hosting the 6th International Charity Regulators Forum in Melbourne in April 2014. Delegates attended from seven common law jurisdictions: Australia, Canada, England and Wales, Ireland, New Zealand, Scotland and Singapore. The tax revenue agencies from Australia, the United Kingdom and New Zealand also took part. The two-day forum proved an invaluable opportunity to share common regulatory experiences and challenges, learnings on regulatory best practice, and effective measures to support the charity sector.
The ACNC regulatory model is unique to Australia and to the context in which we operate. When establishing the ACNC we benefited enormously from the experience of many of our international counterparts, in particular New Zealand, Canada, Singapore and England and Wales. We were able to take elements from each of these jurisdictions and learn from them. Now, we have been able to provide support and guidance to Ireland’s new charity regulator, which was established in April 2014.
Since the international meeting, the ACNC has initiated and hosted telephone meetings with international counterparts on matters of regulatory practice and shared concerns.
ACNC Repeal Bill
All this progress has been achieved despite the climate of uncertainty surrounding the future prospects of the ACNC. In March, the Australian Charities and Not-for-profits Commission (Repeal) (No. 1) Bill 2014 (Cth) was introduced in the House of Representatives. A subsequent Senate Economics Legislation Committee inquiry into the Repeal Bill was held with the Government majority report supporting the repeal and dissenting reports from Labor and the Greens parties. A second Bill is proposed which will detail the ACNC’s replacement and transition arrangements. Until this Bill is passed and enacted, the ACNC is empowered and required to carry out its functions.
As Commissioner, I am ensuring the ACNC plans for two possible futures; one where the ACNC Repeal Bill is supported by both houses of Parliament and the regulatory functions return to the Australian Taxation Office and Australian Securities Investment Commission, and the other where the Bill is not supported and the ACNC continues as an effective national charity regulator.
Continuing to deal with an uncertain context
The ACNC has lived in a climate of uncertainty since its inception, and this is likely to continue until Parliament votes on the ACNC Repeal Bills. This sustained instability has impacts on staffing, on the sector, and on our capacity to give full effect to the objects in the ACNC Act.
Despite the confusion and frustration this policy uncertainty generates for charities, the ACNC will continue to implement its Act as we are legally required to do. We have given priority to finalising the Charity Register and the information technology platform for the Charity Portal, to achieving what red tape reduction initiatives we can, and to working with charities to continuously improve governance practice in the sector.
The Charity Register is a valuable asset for the community, providing the public with a freely available resource on charities. Over the coming year, the ACNC will continue to prioritise finalising the Charity Register so that all Australians can find information about registered charities with confidence, and certainty about the integrity of the information. The year will also see the next step in providing greater transparency and accountability of charities with the 2014 Annual Information Statements collecting financial and governance information about charities’ operations, which will also be accessible via the Charity Register.
The information technology platform for the Charity Portal will be finalised, introducing additional functionality to assist charities in being sustainable. We will continue to work across the sector and with government agencies to achieve regulatory and reporting simplification, such as those that can be delivered through the Charity Passport, and acceptance of financial reports filed with other reporting agencies.
The ACNC will continue to achieve its objectives by providing tailor-made guidance, education and advice services to the sector to support charities in meeting their obligations. An integral part of this in 2014-15 will be holding ‘Ask ACNC’ sessions around Australia, focussing on areas with low level of submissions of Annual Information Statements, or a high number of charities we have not been able to contact through the ACNC’s ‘Return to Sender’ project.
A tribute to our staff, our board and the sector
I wish to thank the ACNC staff for their continued dedication to the delivery of services and support to the charity sector. It has been a very busy time for staff, with many achievements in our first full financial year. It is a testament to the professionalism of staff that they have managed to deliver continuous and quality service through this uncertain period.
I also wish to thank the ACNC Advisory Board and its Chair, Robert Fitzgerald AM, for their ongoing advice and recommendations. Through its program of meetings with local charities around Australia, the Advisory Board provides an important conduit in communication between the sector and the ACNC. I would like to acknowledge their efforts in undertaking this vital work.
We have worked extensively with various Australian, state and territory government organisations throughout the year in order to reduce the regulatory burden for the sector. Be it through memoranda of understanding, information checking and sharing arrangements, or through the adoption of the Charity Passport, we would like to thank these agencies for their efforts and collaboration, all of which provide immense benefit to the sector.
We also continue to benefit from a constructive and collegial working relationship with the Australian Taxation Office and from the back-office services they provide on a fee-for-service basis through a memorandum of understanding
I am proud of what the ACNC has achieved in our first full financial year of operation. In this report you will see that we have worked hard to engage and support registered charities, promote red tape reduction and build on public confidence in the sector.
It remains a great privilege for me personally and for ACNC staff to work with this important and diverse sector that is run on passion, hard work and the desire to make the world a better place.
Susan Pascoe AM