Australian Charities and Not- for Profits Commission – the six month report card Missions Interlink 16 July 2013 Murray Baird Assistant Commissioner General Counsel Australian Charities and Not-for Profits Commission

An Australian Charities Commission a new independent statutory agency, the Australian Charities and Not ‑ for ‑ profits Commission (ACNC) Federal Budget May 2011

Charity sector: Who is in? Welfare and disability; (Non Government) Schools, Universities etc; Churches, Religious organisations Conservation, Arts, Childcare, Community infrastructure

Charities Commission

What will ACNC Do? Registration Information Compliance Education and guidance

Guidance Assistance Investigation Graduated Sanctions Deregistration

The Vital Signs 1 million hits on website; 52 guides and fact sheets; 57,000 charities from ATO; 740 new charities; 11.4 days to register a charity; 14,500 calls answered; 6,900 written queries answered 4,000 face to face presentations and consultation attendees; 119 complaints about charities

What does a charity need to do? Keep records; Report annually; Notify changes.

Ducks in a row

Governance Standards  A set of principle based minimum governance standards;  Charities must comply to be registered  Ensure a minimum level of accountability  Basic Religious charities are exempt PRESENTATION TITLE | DATE

Basic Religious Charities A Registered charity For advancement of religion Not in another category (such as education or welfare) Not incorporated under Association or Corporations Acts Not a deductible gift recipient (except operating a DGR with annual revenue of less than $250K) Not part of a reporting group; Not receiving more than $100k in government grants.

 Members, Donors, Volunteers, Public  Confidence that the Charity is acting openly, accountably and transparently  For its stated purpose  In an effective and efficient manner Sunlight is said to be one of the best Sunlight is said to be one of the best disinfectants.. Louis Brandeis Why?

Five Governance Standards Purposes and character of an NFP entity Accountability to members Compliance with Australian laws Suitability of responsible entities Duties of responsible entities

External Conduct Standards Confidence that funds sent outside Australia are reaching legitimate beneficiaries, used for legitimate purposes and are not contributing to terrorist or criminal activities Consultation and scrutiny

“In Australia” – the current position S ITAA 1997 If you are a charity or a religious institution Has a physical presence in Australia and to that extent incurs its expenditure and pursues its objectives principally in Australia; Is an overseas aid fund Is a prescribed institution that has a physical presence in Australia but incurs its expenditure and pursues its objectives principally outside Australia. Gifts and government grants disregarded.

Word Investments Where does Word pursue its objectives? It does so by donating funds in Australia to organisations which will use those funds probably outside Australia for a charitable purpose “inconsistent with the ATO interpretation and with clear policy intent” EM “In Australia”Bill 2012

New Law Tax Laws Amendment (Special Conditions for Not-for- profit Concessions) Bill 2012 Income tax exempt entities must operate and pursue their objectives principally in Australia unless they are DGR or prescribed. Follow the money. Current prescribed entities will be grandfathered. Substitute operates and pursues for expenditure. DGRs “solely in Australia” unless overseas aid funds.

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