Key points:
- Internal disputes and conflicts of interest can cause serious damage to a charity's reputation and hamper their day-to-day operations.
- Guarding against them is relatively simple - the important first step is to have clear policies and procedures.
- The ACNC's primary approach is to help charities meet their obligations through guidance, education and support.
- If charities continue to do the wrong thing, the ACNC will take appropriate action.
- The ACNC has a number of resources and factsheets which can help charities through issues. Our Governance for Good guide is a great place to start.
Internal disputes can involve disagreements between individuals or groups inside a charity – for example, between members and the board or committee, or even between board and committee members.
Such disputes can be damaging for any organisation, but for small charities they can be particularly problematic.
The ACNC does not deal with internal disputes in charities unless there is a serious risk to public trust and confidence. However, we do advise of some basic steps small charities can take to reduce the chances of internal disputes.
It is important to have a culture of open, honest conversation, and to encourage dialogue, maintain respect and a willingness to listen.
Disputes shouldn’t be ignored or allowed to fester, so having a practical policy aimed at addressing and resolving disputes is vital. If an agreement or compromise cannot be reached, consider using an independent mediator.
Conflicts of interest are common. However, problems can arise when these conflicts of interest aren’t recognised, declared or addressed through a conflict of interest policy.
Small charities, or those operating in small communities, can be more likely to encounter conflicts of interest. Drawing on a smaller pool of people when searching for board members or sourcing goods and services can increase the chances that a charity will have to deal with the issue.
Charities should have a written conflict of interest policy, as well as a register of interests for their board and staff.
It is important to remember that having a conflict of interest isn’t a problem in itself. The real problems are not being open and honest about a conflict, not declaring it, and allowing it to influence decision making.
For more information, see our conflict of interest factsheet.
Being insolvent means your charity can’t pay its debts when they become due and payable.
Under Governance Standard 5, a charity's Responsible People (the board or committee members) have a duty to not allow their charity to operate while insolvent.
If you think your charity may be insolvent, or at risk of becoming insolvent, you should seek professional advice immediately. If your charity is incorporated, you may need to notify your state or territory regulator.
Double defaulters are charities that do not submit an Annual Information Statement for two or more years. These charities are at risk of the ACNC revoking their registration.
The ACNC reminds charities about submitting their Annual Information Statement in a variety of ways, including reminder letters, emails, newsletters, the fortnightly Commissioner’s Column and social media campaigns.
The ACNC does receive complaints about charities from the public, and has the power to investigate and follow up these concerns, or refer them to other agencies if needed. The ACNC does advise members of the public to raise their concerns with the charity directly before they approach the ACNC.
See our guidance about raising a concern about a charity.