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NFPs Call for Clarity on Transition to Charity Regulator

27 March 2012 at 8:32 am
Staff Reporter
Not for Profits have asked for greater clarity around about transitional arrangements for the new charity regulator in submissions to the ACNC Taskforce.

Staff Reporter | 27 March 2012 at 8:32 am


NFPs Call for Clarity on Transition to Charity Regulator
27 March 2012 at 8:32 am

Not for Profits have asked for greater clarity around about transitional arrangements for the new charity regulator in submissions to the ACNC Taskforce.

The Australian Charities and Not for Profit Commission (ACNC) Taskforce released a Discussion Paper in December 2011 on the proposed operations of the regulator and has received 121 submissions.

Susan Pascoe, the Interim Commissioner and Head of ACNC Implementation Taskforce says overall, there was general support for the establishment of the ACNC and its regulatory approach.

However, she says greater clarity was sought on transitional arrangements to allay anxieties within the sector.

“Several stressed the importance of avoiding any imposition of unnecessary reporting requirements on existing charities during the transition period," Pascoe said.

“There was widespread concern that without harmonisation within Commonwealth agencies and between the Commonwealth, State and Territory Governments, the scope of the ACNC's activities could add to the compliance burden of charities.” 

Pascoe says that those submissions that included matters that relate to policy or legislative matters have been referred to Treasury for consideration.

The Taskforce says by way of summary that:

  • Many sought clarity on whether the ACNC's role will expand to include the regulation of Not for Profit (NFP) entities.
  • Others sought clarity on the process for withholding information from the Information Portal, such as information provided by women's shelters or Private Ancillary Funds.
  • Some churches and complex multi-site charities would like the opportunity to negotiate grouping arrangements for reporting purposes.

The ACNC Taskforce has developed a Submissions Summary to highlight some of the key matters raised.

All submissions will be available at the time of the scheduled to release of the ACNC response.  

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  • Michael Hardy says:

    The complex relationship between the States, Territories and Commonwealth may mean that, for some charities, at some point in the next few years, some of them will find that they have a higher reporting obligation (a cost) than they might have under some theoretical ‘status quo’ situation.

    Charities may need to consider the cost-benefit trade-off of each of their interactions with an arm of government. If the benefits of interacting with any particular arm or level of government are exceeded by the costs, then the charity should state this clearly and work with the relevant arm and layer of government. Withdrawing from any dealings which represent a ‘net loss’ relationship is always an option, however painful to contemplate.

    It should also be borne in mind that the benefits provided by ‘government’ are really a reflection of the benefits that society is prepared to extend to charities through the processes of democratic government.

    In relation to the Commonwealth government, and the Australian Charities and Not-for-profits Commission (ACNC), it is very reasonable that if charities consider that the cost of interaction with the ACNC and other Commonwealth agencies exceed the benefits acquired from the Commonwealth, then they should state this plainly.

    In my view it would not be reasonable for a charity to weight the cost of state, territory or local government interactions against commonwealth government benefits. Nor would it be reasonable for charities to attribute costs of normal record keeping or similar matters against the benefits provided by government. To do so would be tantamount to a charity saying to the public that they would not normally keep any records of their actions.

    Government agencies also have an onus to reduce costs, or provide greater value, where possible. Uncertainty is a factor which can increase costs. The ACNC task force has a unique opportunity to position the ACNC to reduce uncertainty in the period between July and October 2012.

    Presumably the enabling legislation for the ACNC will have passed by 1 July 2012, the Commissioner of the ACNC will have been appointed and the staff will be recruited. This will allow the Commissioner of the ACNC to provide indications about how the ACNC it will utilise its powers for educative purposes; increasing value to the community and to the sector. The Commissioner of the ACNC would also be in a position to provide indications about how other regulatory powers might be used, to reduce uncertainty in the sector, to hopefully reduce any anxiety and to otherwise reduce the costs associated with uncertainty.

    By 1 October 2012 the charitable sector should expect to feel confident that the benefits provided by the Commonwealth government do exceed any costs associated with dealing with the Commonwealth government, including the ACNC. The broader community should also feel confident that it will receive good value from the ACNC in operation.

  • Ted Flack says:

    Whilst the ACNC Information Portal, Standardised Business Reporting initiatives and education functions are both long overdue and welcome, it is very important that ACNC does not create an additional layer of fundraising regulation on some kind of vague promise that “it will all be OK as we work with the States and Territories to achieve a one-stop-shop regulator”.

    Given the vested interests in State bureaucracies and the new political landscape at COAG, the prospects of successful “harmonisation” of fundraising regulation in the near future are less than certain.

    Much of the ACNC focus has so far been on the regulation of charitable status and good progress has been made. But if, after all that has been written over the last 20 years about the need for a single national regulator for charitable fundraising, we end up with yet another layer of fundraising regulation, at the operational level of many charities, things will be worse, not better.

    Take for example ABC Charity that is registered with ACNC as a DGR and as a Registered Charity in QLD. It has a web site that has facilities for soliciting donations and bequests, selling charitable merchandise and accepting payments for its Charity Ball (all potentially across State boundaries).

    Under the present ACNC proposals, it will need to report to both ACNC and its QLD regulator but the details of the financial information required are not comparable and must be recalculated for each return. Some legal opinion suggests that ABC Charity also needs to register in all the other States where it may have donors or customers.

    Surely we can do better than this?

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