ACNC Deregisters Two More Charities

The charity regulator has revoked the status of a children’s cancer charity and an affordable housing organisation after an investigation into what the Australian Charities and Not-for-profits Commission (ACNC) described as the result of mismanagement or deliberate breaches of its regulations.

The two organisations are Kids Cancer Relief NSW and Victorian-based housing charity Ethan Affordable Housing Limited.

Kids Cancer Relief NSW Inc had its charity status revoked by the ACNC on 3 August 2016. The charity’s website says the organisation undertakes telephone-based fundraising and then donates money to social workers based in children’s wards at country hospitals.

According to its website, Kids Cancer Relief NSW Inc. is funded by fundraising events such as raffles, partnerships, public appeals and and donations.

The most recent donation appears to be in April 2016 when the charity delivered an iPad and cheque to Orange Health Services, a public hospital in regional NSW. The charity also handed over a $20,000 raffle prize in July 2016.

“KCR is dedicated to assisting kids with cancer and other related serious illnesses and their immediate families throughout country and regional areas with real and immediate problems,” the website said.

“We do this by providing financial support to hospital based social workers in country and regional hospitals, who allocate the money to families where a family member is suffering from medically diagnosed cancer.”

However, the ACNC’s revocation was backdated to 1 July 2013. According the Australian Business Register it has been operational since 2011. The charity’s president, Philip McKenzie, could not be contacted for comment.

Kids Cancer Relief NSW Inc was endorsed by the ATO as a deductible gift recipient with access to Commonwealth charity tax concessions, GST Concession, Income Tax Exemption, and FBT Rebates.

Ethan Affordable Housing had its charity status revoked by the ACNC on 25 July 2016. The Victorian charity is recorded on the Australian Business Register (ABR) as being operational since 2009. The date of revocation was backdated to 1 July 2013.

The ACNC said Ethan Affordable Housing was endorsed by the Australian Taxation Office (ATO) to access Commonwealth charity tax concessions GST Concession, Income Tax Exemption and FBT Rebates.

The charity’s website says it helps investors fund the supply of affordable housing via the National Rental Affordability Scheme.

However, charity director Ashley Fenn told Pro Bono Australia News that his organisation had requested that it be deregistered because it did not need charity status to run its affordable housing model.

“We haven’t been claiming any tax relief and so it was a process that was costing us a fortune to keep up with, the audits and jumping through all their hoops. We weren’t getting any advantage from it,” he said.

“We provide affordable housing to low and middle income families… We have affordable rental models as well.”

Fenn agreed that the organisation could have been in breach of regulations because it still hadn’t provided the ACNC with last year’s audit.

“It was tied up with other entities and rather than pull it out separately and go through that process… well, there was no accusation or any mention of any deliberate mismanagement or anything like that.

“The particular clients that we were [originally] targeting some time ago thought… that it was the best form of entity to do this in… In the end is was all too hard and we just do what we do and it doesn’t make any difference to our status what services we deliver.”

He said because the organisation had not made any profits it had not taken any tax benefits out of the system.

However an ACNC spokesperson told Pro Bono Australia News that the regulator had revoked the charity status of Ethan Affordable Housing Limited following a compliance investigation into their activities and operations.

“Ethan Affordable Housing Limited did not apply to voluntarily revoke their charity status,” the spokesperson said.

“A revocation following a compliance investigation is distinctly different from a voluntary revocation of charity status. Registered charities can apply to voluntarily have their charity status revoked, and the ACNC will assess this application before allowing the revocation. Where a compliance investigation is already underway, it is unlikely that the ACNC will approve an application for voluntary revocation.

“Ethan Affordable Housing Limited’s revocation of charity status was the result of an ACNC investigation that assessed their eligibility for registration and compliance with the ACNC Governance Standards.”

The ACNC announcement follows the revocation of a total of seven organisations in June 2016.

Commissioner Susan Pascoe AM said that while the ACNC could not provide further details, members of the public can be assured that revocation is reserved for the most serious of cases.

“The ACNC’s approach to regulating Australia’s charity sector is to be firm, yet fair,” Pascoe said.

“When we find serious circumstances of mismanagement or deliberate breaches of the ACNC Act we will revoke charity status.We make no apology about taking a tough stance when necessary.”

Commissioner Pascoe also encouraged members of the public to raise any concerns with the ACNC.

“Each month we receive around 60 concerns about charities, two-thirds of which come from members of the public.

“While the majority of the issues raised can be managed through education and guidance, the public often provide valuable information that helps us investigate, and ultimately, revoke charity status.”

The organisations have 60 days from their respective date of revocation to object to the ACNC’s decision. The organisations will now lose access to Commonwealth charity tax concessions.