How we ensure charities meet their obligations

In line with our regulatory approach statement, the ACNC places an understanding of charities at the foundation of how we ensure charities meet their obligations. This covers our focus on guidance and education, how we take compliance action, and when we will use our powers.

Guidance, education and advice

We focus on supporting charities to meet their obligations through advice, guidance, education and support. For example, we provide guidance on what charities need to do to meet their ACNC obligations, on good governance and protecting your charity from fraud.

Our compliance powers

The ACNC has powers to gather information, and monitor whether charities are meeting their obligations, and formal compliance powers to respond to charities not meeting their obligations (for example, not acting for their charitable purpose).

Our first focus is on helping charities to meet their obligations through guidance, education and support. Where charities do not respond to this and still fail to meet their obligations, the ACNC may use formal powers to:

  • warn charities that they are not meeting their obligations and explain what action the ACNC may take (warnings)
  • direct charities to do or not do something (directions)
  • make arrangements with charities about what they need to do to meet their obligations - these arrangements can be enforced by a court (enforceable undertakings)
  • ask a court to make charities to do or not do something (injunctions)
  • suspend or remove a 'responsible person' such as a board or committee member (suspension and removal)
  • disqualify a responsible person (such as a committee or board member, or trustee) who has previously been suspended or removed for 12 months. During that time, the person is not allowed to be a responsible person of any charity (disqualification) and will be listed on the disqualified persons register
  • in exceptional circumstances, revoke (cancel) a charity’s registration (which may affect a charity’s eligibility for tax concessions and other government benefits, concessions or exemptions), and
  • apply administrative penalties if a charity makes false or misleading statements or fails to lodge documents (such as reports, notices, returns or statements) on time.

Where appropriate, our powers to revoke a charity’s registration or apply administrative penalties can be used against any charity. For all other formal powers, we can only exercise them on ‘federally regulated entities’.

Find out more about the definition of 'federally regulated entities’, in our glossary.

When we will use our compliance powers

When deciding whether to use our powers or make certain decisions, we will apply our regulatory approach, the transitional approach, and follow our compliance and enforcement policy and procedures. We will consider the:

  • type of problem
  • person or situation at risk (for example, whether it affects people, money or public trust and confidence generally)
  • nature and degree of potential harm
  • likelihood and frequency of occurrence or recurrence
  • risk profile of the charity (for example, the size of a charity, the existence of accountability mechanisms, its history of compliance and cooperation), and
  • behaviour of those responsible for the charity.

Revocation of lost charities

As part of regulating charities, we are checking that all of the charities registered with us are operating and have contacted us. We have published a notice of intention to revoke registration of a number of charities who we have been unable to locate or contact, despite many attempts.

Applying penalties

The ACNC can apply administrative penalties if a charity makes false or misleading statements or fails to lodge documents on time. We may remit all or part of any penalties that apply, following our regulatory approach.

Example schedule of administrative penalties that apply to charities who fail to lodge an Annual Information Statement by its due date

Charity size

Minimum penalty
(Less than 28 days overdue)

Maximum penalty
(More than 112 days overdue)

Small:
Annual revenue is less than $250 000

$180

$900

Medium:
Annual revenue is $250 000 or more, but less than $1 million

$360

$1 800

Large:
Annual revenue is $1 million or more

$900

$4 500

Publishing compliance decisions

We must publish the use of any formal powers (other than applying administrative penalties) on the ACNC Register. It will appear on the charity’s ACNC Register page.

See our summary of current ACNC charity compliance decisions.

More information

Regulatory approach

Compliance-related policy statements

Compliance-related operational procedures

These Operational Procedures are currently being reviewed by the ACNC and will be updated in due course.