In my fifth and final year as Commissioner it is time to reflect on the achievements of the Australian Charities and Not-for-profits Commission (ACNC).
The ACNC is in its tenth year and, along with Assistant Commissioner General Counsel, Anna Longley, it has been rewarding to lead the team.
At our very first meeting on 11 December 2017, I invited staff to be my tutor. They have done so, and it has been an excellent collaboration throughout.
Since its inception the ACNC has established itself as one of the world’s leading digital-first charity regulators. We also set a goal of creating the highest quality information for the greatest number of people. We have decentralised decisions by placing good digital information in the hands of the public, whether donors or charities.
This has helped us become a more effective regulator, and a more efficient regulator.
The ACNC Charity Register
Charity registration brings many benefits, one of which is a listing on the ACNC Charity Register. The Register provides searchable, comprehensive and freely available information about Australia’s registered charities.
In March we launched the ‘charity marketplace’, enhancements to the Register that allow anyone to search for charity programs - by location or program type, and without having to know the names of the charities doing the work. In fact, I raised the concept on day one. It took some time to work out how to do it and bring it to market!
So much of what Australia’s charities do is captured in the ‘language’ of programs. The enhanced search capacity brings with it an increased visibility of those programs and to the work charities do.
The enhancements support greater transparency and more informed decision making for donors and volunteers. The new search is also an invaluable tool that serves funders, the media, and researchers and charities, who can look to collaborate with likeminded organisations.
Our job is to support public confidence in the sector, and the best way to do this is to provide useful information.
Register searches have risen from one million in 2018 to five million in 2021-22. Early indications show that the enhanced register features are highly popular, with searches on target to reach seven million in 2022.
Most Australian charities are small (65%), volunteer run (51%) organisations. The enhanced register features provide a greater opportunity for these small charities to publicly showcase the work they do.
Registrations
In 2018 there were 55,000 charities on the register; today there are nearly 60,000, despite the revocation of 6,519 charities during the same period.
For several years the ACNC received about 4,000 applications for registration per year. In the past two years that number has risen to around 6,000 applications per year.
During this period, we have registered a similar number of charities each year, while also strengthening our processes for assessing applications, in accordance with the recommendations of the Australian National Audit Office’s Performance Audit in 2020.
The complexity of applications is increasing. This is particularly true where a charity is seeking registration as a Public Benevolent Institution, or where it will be operating outside Australia (meaning we must assess its ability to meet the ACNC’s External Conduct Standards). This complexity accounts in part for the rise in re-applications and new applications, as applicants work to resolve the issues that prevented their initial registration application.
The number of staff we have assessing applications has not changed in this period. However, an increase in staff to undertake reviews of already-registered charities has allowed us to put processes in place to assess applications more efficiently. Applications are currently being assessed within 12 days of submitting a complete application.
Integrity of the register
To support that end, the last 12 months has seen the ACNC reviewing registered charities to ensure their records are accurate and that only eligible charities are listed.
We began this work in 2020-21 by examining 303 charities that were also Public Benevolent Institutions and were missing information on their charity register record - such as governing documents and Responsible People.
We examined these charities to assess their eligibility to remain registered as PBIs and, where necessary, provided guidance to assist them meet their obligations.
Where this was not possible, we revoked charity registration or access to specific charity subtypes. Most of the charities whose registrations were revoked (52% did so voluntarily) were found to be no longer operating, or to be government entities.
Our reviews looked at charities at risk of not being entitled to registration, for example, where there was new case law that might affect their registration, or where the charities’ purposes indicated they may not be charitable.
Of the initial 577 higher risk charities reviewed we found:
- 13% required no follow up
- 15% had administrative concerns regarding their registration obligations, with the ACNC following up by sending them guidance.
- 72% had potential entitlement concerns and either have been or will be subject to a more detailed review.
Other administrative reviews, which covered all registered charities, identified:
- 248 charities with cancelled Australian Business Numbers (ABNs)
- 125 incorrectly reporting as a Basic Religious Charities
- 2470 without an appropriate governing document
- 2513 with information withheld from the charity register that should not be
We also identified charities that did not have any Responsible People listed on the Charity Register or did not appear to have an appropriate number listed. We will continue to work with charities to ensure they meet their administrative obligations.
Compliance and enforcement
The ACNC introduced compliance reviews in 2020-21 to assess charities’ general compliance and to help us better respond to charity sector risks.
The review program enables us to target and understand issues that affect public trust and confidence in the sector. One example of these reviews of which we are most proud are the Bushfire Response Reviews undertaken in 2020.
In addition, strengthening our risk profiling tools has enabled us to be more proactive in our compliance work. In 2021-22 we investigated 121 cases, of which 50 were identified through data risk profiling.
Process improvements have had a significant impact on the time an investigation takes. In 2019-20 the median time to complete an investigation was 308 days. So far in 2021-22, the median time to complete an investigation has fallen to 133 days.
We have also introduced new compliance tools such as self-audits and self-evaluations to increase the number of charities we can engage with to improve their governance.
These new tools have enabled us to reach a much greater number of charities we assess as being at risk of non-compliance, and have helped target our compliance efforts where they will have the most impact.
Using our data risk profiling, in 2021-22 we proactively identified 43 charities who we then requested complete a self-audit. During the same period, we contacted 264 charities to request they undertake a self-evaluation of their governance.
These new tools enable us to support compliance in instances where we believe the charity needs to improve its governance, but where we consider the risks do not warrant a full investigation.
Understanding and supporting charities
The ACNC communicates with a variety of audiences to:
- help charities understand their obligations
- raise awareness of our role as regulator among the public and media, and
- to work with other agencies.
I have visited 133 charities across the country since July 2018 and sought both their stories, and their views on the work of the ACNC.
We devote significant resources to providing multi-channel guidance and education to support registered charities. Our website contains rich content and is increasingly recognised as a valuable resource.
The site had five million unique page views in 2018 and more than 11 million in 2021. That number looks set to climb again in 2022.
Since July 2018 we have developed a range of new guidance and tools to support charities, including for the reviews of Deductible Gift Recipient charities, Governance Standard 6, the External Conduct Standards, and the Governance Toolkit.
We have established a Reporting Hub, improved our guidance on the Annual Information Statement, and produced new guidance on reporting on key management personnel remuneration and related party transactions.
We have also delivered 39 webinars and 16 podcasts to help charities understand their obligations and improve their governance.
In June 2020 we launched a monthly newsletter to provide subscribers with the latest charity news and updates, links to useful guidance, reminders about obligations and answers to the most common questions charities ask us. The Charitable Purpose is sent to approximately 60,000 subscribers – comprising charities and individual subscribers.
We also utilise social media to deliver our messages broadly and have a growing following across all platforms. For example, our Twitter followers have grown from 6,850 in June 2019 to 11,148 in May this year.
Australia’s charities are doing extraordinary work in contributing to the wellbeing of Australia. We believe that, with the help of the ACNC, charities’ understanding of good governance and the expectations of the Australian community is improving.
Best wishes,
The Hon Dr Gary Johns