1. Who regulates Australian charities? Matt Crichton | Communications Officer Anne Duffy I Advice Services Manager Caitlin Patterson | Advice Services Officer Nicole Rowan I Senior Policy Officer Suhanya Mendes| Legal Counsel Madison Lovell I Communications Officer 3 May 2016

2. Who regulates Australian charities? About the ACNC Regulatory burden and the ACNC’s role in reducing red tape Key regulators –ATO, for endorsement for charity tax concessions and benefits –ASIC, for charitable companies limited by guarantee and others –ORIC, for Indigenous-controlled charities –Department of Education and other departmental agencies –State and territory consumer affairs and other regulators Regulatory overlap, focusing on fundraising, state taxation and incorporated associations laws Moves towards harmonisation More information

3. Who the ACNC regulates: Charities, NFPs and DGRs Charities (55,000) Not-for-profit Charitable purpose Public benefit Meet ACNC requirements Deductible Gift Recipients (DGRs) 32% of charities Not-for-profits (NFPs) (600,000) The ACNC regulates charities

4. To maintain, protect and enhance public trust and confidence To support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector To promote the reduction of unnecessary regulatory obligations 1 About the ACNC Our objects 2 3 ACNC Act

5. About the ACNC: What we do Register new charitiesMaintain a charity registerRegulate charities (reporting and compliance)Advice, guidance and educationReduce red tape for charities

6. Changes after the introduction of the ACNC When the ACNC was established in December 2012: the ACNC replaced the ATO as the agency undertaking the registration of charities (deciding charitable status, and charity subtype) the ATO retained its role of endorsing for Commonwealth taxation concessions and benefits a number of corporations law sections were ‘switched off’ for registered charities (for example, ASIC-registered charities only need to report to the ACNC).

7. What is red tape, and how does it affect charities? Red tape describes excess or unnecessary bureaucracy and regulation Charities are subject to a wide range of rules and regulations, many complex The larger a charity is, and the more it receives grants funding, the more reporting obligations it has To meet fundraising, state taxation and incorporated associations requirements costs $34.85 million Reporting duplication alone costs the sector at least $99.5 million a year, if not much, much more

8. Charity example: fundraising A charity that operates in Melbourne’s CBD undertook local fundraising activities It was registered to fundraise in Victoria. It used a direct debit arrangement. But when donors moved interstate or OS it technically in breach of fundraising rules As the donation was automatic, the charity was not notified of a change of address and had no way of knowing which state or territory’s fundraising rules might apply Even if it did know, it would have taken significant resources to identify which rules were applicable, if there were exemptions, and to ensure the rules were followed To be compliant, the charity has to choose whether to: –identify and meet requirements in every relevant jurisdiction, or –stop certain types of fundraising.

9. What is the ACNC doing about red tape? The ACNC’s work to reduce red tape includes: developing a ‘report once, use often’ framework (for information-sharing) streamlining reporting arrangements for charities with other Commonwealth regulators (like ORIC) harmonising ACNC and state and territory regulatory requirements for charities registered under state and territory laws commissioning research on red tape reduction in the not-for-profit sector to inform red tape reduction initiatives, and providing guidance and advice to charities to assist them to meet their regulatory obligations.

10. Information sharing: Charity Passport

11. Commonwealth regulators Main Commonwealth agencies relevant for charities: ATO (charitable tax concessions) ASIC (for ‘registrable bodies’ and companies limited by guarantee) ORIC (Office of the Registrar of Indigenous Corporations) Other agencies depending on activity (eg. education, health)

12. Commonwealth regulators: ATO The Australian Taxation Office (ATO) is responsible for deciding eligibility for Commonwealth charity tax benefits. Charities may be able to apply to the ATO for a different tax benefits including: income tax exemption and a refund of franking credits goods and services tax (GST) concessions fringe benefits tax (FBT) rebates and exemptions, and deductible gift recipient (DGR) status. There are some reporting requirements associated with endorsement. Visit www.ato.gov.au/non-profitwww.ato.gov.au/non-profit

13. Commonwealth regulators: ASIC If your company limited by guarantee is registered as a charity with the ACNC, you have ongoing obligations to the ACNC. You do not have to report annually to ASIC or notify ASIC of certain changes. Generally, you should contact ASIC for anything relating to the company's corporate status (such as change of company name) and the ACNC for anything relating to your charitable status. Other changes relate to holding members’ meetings, meeting civil statutory directors’ duties and keeping records. These are replaced by ACNC requirements. If your company stops being registered with the ACNC, you must comply with all ASIC requirements again. For more information visit www.acnc.gov.au/CLGwww.acnc.gov.au/CLG For current information about your charity, refer people to the ACNC Charity Register NOT the ASIC Register.

14. Commonwealth regulators: ORIC Some Aboriginal and Torres Strait Islander organisations are registered as corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth) (CATSI Act). These corporations are regulated by the Office of the Registrar of Indigenous Corporations (ORIC). If your organisation is registered under the CATSI Act as a corporation, as well as with the ACNC as a charity, ORIC continues to be your corporate regulator. Continue to meet your ORIC obligations, including reporting. ORIC and the ACNC are working together under a Memorandum of Agreement and Indigenous corporations can continue to operate and report to ORIC as they have always done. For more information visit www.acnc.gov.au/Indigenouscorporations and www.governance.reconciliation.org.auwww.acnc.gov.au/Indigenouscorporations www.governance.reconciliation.org.au

15. Other Commonwealth agencies: Department of Education and Training Obligations because of the charity sub-sector Non-government schools Non-government schools currently submit a financial questionnaire to the Department of Education and Training (DET). To help reduce duplication in reporting, for the 2014 and 2015 reporting periods, non-government schools do not have to provide financial information to the ACNC directly. We will accept the financial questionnaire as meeting our requirements under the ACNC Act to complete the financial information in the Annual Information Statement (and to lodge a financial report for medium and large charities). More information: www.acnc.gov.au/nongovschoolswww.acnc.gov.au/nongovschools Hospitals and other health sector agencies Charities will have other obligations to Commonwealth agencies, such as for quality assurance, reporting and funding requirements. Refer to those agencies for more information.

16. Other Commonwealth agencies Attorney-General’s Department Australian Bureau of Statistics Australian Competition and Consumer Commission Australian Prudential Regulation Authority Australian Skills Quality Authority Department of Agriculture Department of Communications Department of Defence Department of Employment Department of Finance Department of Foreign Affairs and Trade Department of Human Services Department of Immigration and Border Protection Department of Industry and Science Department of Infrastructure and Regional Development Department of Social Services Department of the Environment Department of the Prime Minister and Cabinet Department of the Treasury Department of Veterans' Affairs Fair Work Commission Tertiary Education Quality and Standards Agency

17. Other obligations of charities There are a number of other laws that affect the operation of charities, including laws on: –employment –trading –occupational health and safety –workers' compensation, and –discrimination. These obligations can be different, depending on which state or territory your charity operates in. Some charities may also have responsibilities that are specific to their area of work, such as needing accreditation or requiring police or working with children checks. Failing to comply with relevant laws in your state or territory can have serious consequences for your charity. Please refer to your relevant regulatory authority for more information.

18. State, territory and local government regulation Three main areas of regulatory duplication: Fundraising State taxation and local government concessions Incorporated associations regulators More information: www.acnc.gov.au/regulatorlistwww.acnc.gov.au/regulatorlist

19. Fundraising regulation Charities undertake fundraising to finance their work. In almost all states and territories, organisations must apply for an authority, registration or licence to conduct fundraising appeals within that particular jurisdiction. For charities that fundraise in more than one state, they need to comply with the rules in each of those states. Fundraising regulations differ in each Australian state and territory. These differences primarily exist across three key areas: –applying for fundraising registration or a license, and retaining eligibility to fundraise –maintaining ongoing compliance –reporting.

20. Fundraising regulation JurisdictionJurisdictionFundraising LegislationFundraising RegulationsFundraising Regulations New South WalesCharitable Fundraising Act 1991Charitable Fundraising Regulation 2015 VictoriaVictoriaFundraising Act 1998Fundraising Regulations 2009 QueenslandQueenslandCollections Act 1966Collections Regulation 2008 Western AustraliaCharitable Collections Act 1946Charitable Collections Regulation 1947 Street Collections (Regulation) Act 1940 Street Collections Regulations 1999 South AustraliaCollections for Charitable Purposes Act 1939N/AN/A TasmaniaCollections for Charities Act 2001 Collections for Charities Regulations 2001 Australian Capital TerritoryCharitable Collections Act 2000Charitable Collections Regulation 2003 Northern TerritoryN/AN/AN/AN/A

21. State taxation and local government concessions State/territory taxes Charities may also be eligible to receive exemptions from taxes collected by state and territory governments such as payroll tax, land tax and stamp duty. Local government concessions Some local government authorities may offer concessions to charities. For more information, contact the local government authority in the areas where your charity operates.

22. State taxation JurisdictionJurisdictionTaxation LegislationTaxation Regulations New South WalesDuties Act 1997 (NSW) Land Acquisition (Charitable Institutions) Act 1946 (NSW) Pay-Roll Tax Act 2007 (NSW) Land Tax Management Act 1956 (NSW) N/AN/A VictoriaVictoria Duties Act 2000 (Vic) Land Tax Act 2005 (Vic) Payroll Tax Act 2007 (Vic) Land Tax Regulations 2005 QueenslandQueensland Duties Act 2001 (Qld) Land Tax Act 2010 (Qld) Payroll Tax Act 1971 (Qld) Taxation Administration Act 2001 (Qld) – only relevant state legislation that sets out requirements for charitable status Duties Regulation 2013 Land Tax Regulation 2010 Payroll Tax Regulation 2009 Taxation Administration Regulation 2012 Western AustraliaStamp Act 1921 (WA) Pay-roll Tax Assessment Act 2002 (WA) Land tax assessment Act 2002 (WA) Duties Act 2008 Pay-Roll Tax Assessment Regulations 2003 Land Tax Assessment Regulations 2003 Duties Regulations 2008 South Australia Stamp Duties Act 1923 (SA) Payroll Tax Act 2009 (SA) Land Tax Act 1936 (SA) Stamp Duties Regulations 2013 Tasmania Duties Act 2001 (Tas) Land Tax Act 2000 (Tas) Payroll Tax Act 2008 (Tas) Duties Regulations 2011 Land Tax Regulations 2010 Australian Capital Territory Duties Act 1999 (ACT) Land Tax Act 2004 (ACT) Payroll Tax Act 2011 (ACT) N/A Northern Territory Payroll Tax Act (NT) Stamp Duty Act (NT) N/A

23. Regulation of incorporated associations Many charities have the legal structure of 'incorporated association' and are regulated by state and territory governments. These charities have 'Inc.’ or ‘Incorporated’ at the end of their name. Incorporated associations may have obligations to state or territory government regulators, such as providing annual reports or keeping financial records. Charities must still meet these obligations.

24. Incorporated associations: a comparison

25. Case study: incorporated association requirements A charity was incorporated in the ACT. However, as the it grew and developed, the decision was made to move to a federated model, with incorporated associations in different states and territories, with the head office in Victoria. The result is that each incorporated association must report to and notify the regulator in its state or territory. The other challenge for the incorporated association in the ACT is that the law requires its public officer to live in the ACT, but no board members live in the ACT. This creates a logistical issue for the charity.

26. Moves towards harmonisation Actively working with agencies in each state and territory, as well as Commonwealth agencies, to improve alignment ACNC now has certainty Agreements with a number of agencies to work together Adoption of the Charity Passport Transitional arrangements in the meantime Positive changes occurring, particularly in South Australia and Tasmania, with fruitful discussions in other jurisdictions.

27. Questions?

28. More information ACNC ►acnc.gov.au/redtapereduction ►acnc.gov.au/otherregulators ►acnc.gov.au/regulatorlist ►acnc.gov.au/clg (companies limited by guarantee) ►acnc.gov.au/indigenouscorporations

29. More information

30. acnc.gov.au 13 ACNC (13 22 62) 9.00 am – 6.00 pm AEST advice@acnc.gov.au facebook.com/acnc.gov.au @acnc_gov_au youtube.com/ACNCvideos Contact the ACNC Stay in touch

31. THANK YOU Next webinar Reporting to the ACNC Tuesday 7 June 2016, 12.00pm to 1.00pm Register at acnc.gov.au/webinars education@acnc.gov.auacnc.gov.au/webinars