Australians have a long and proud tradition of helping people in need, and that generosity often extends to those abroad.
In the latest edition of our Australian Charities Report, we found that more than 6% of charities operated overseas. Data drawn from the 2022 Annual Information Statements that charities filed with us, shows that the five most common countries of overseas operation are the Philippines, Indonesia, Kenya, Papua New Guinea, and India.
All charities – bar Basic Religious Charities – must comply with the ACNC’s core Governance Standards. But charities operating outside Australia (including those that simply send funds overseas), must also comply with an additional set of ACNC requirements.
These requirements are called the ACNC’s External Conduct Standards.
They are a set of principles-based standards that establish reasonable expectations of oversight and governance, rather than detailed, specific requirements. The standards cover four key areas of a charity's overseas operations:
- activities and control of resources
- annual review and record-keeping
- anti-fraud and anti-corruption, and
- the protection of vulnerable individuals.
The External Conduct Standards were introduced in 2019 with the aim of promoting greater transparency about operations overseas, and to provide the public with confidence that resources and services provided by Australian charities overseas reach legitimate beneficiaries, and are used for legitimate charitable purposes.
As with all our work, we administer the External Conduct Standards according to our regulatory approach. We work to support charities to comply, and provide education and guidance so charities understand the standards and how they affect their operations.
Charities must be able to provide evidence that they are meeting the standards if we request them to do so. This was the case when we conducted compliance reviews of some charities that were helping vulnerable people overseas, including some that supported orphanages or similar institutions.
Record-keeping is a key way that charities can show they are meeting the standards, and is a fundamental aspect of compliance.
Accurate records not only demonstrate adherence to the External Conduct Standards, but also provide a clear trail of accountability. This is especially important in the context of money laundering and terrorism financing risks, as was recently highlighted in two national risk assessments by AUSTRAC –Australia’s anti-money laundering and counter-terrorism financing regulator and financial intelligence unit.
With global events driving the need for humanitarian aid, it is more important than ever for charities to adhere to these standards. Our updated advice on donating money for humanitarian relief emphasises the need for due diligence and proper oversight to help ensure funds are used appropriately.
The ACNC’s External Conduct Standards play a vital role in ensuring that Australian charities operate with integrity and transparency overseas. By adhering to these standards, charities can continue to make a positive impact on the global stage while maintaining the trust and confidence of the Australian community.
Warm regards,
Sue Woodward AM