ACNC Revokes Church’s Charity Status

The charity status of a small Canberra-based charismatic church has been revoked by the national regulator, the Australian Charities and Not-for-profits Commission – the fourth Not for Profit to lose its charitable status this year.

The ACNC says the decision to revoke the registration and charity status of The New Connection Church Incorporated follows a warning and direction from the regulator to provide information and to address breaches of the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act).

The New Connection Church Incorporated is based in Belconnen in the ACT and the church has been advised that it can object to the revocation decision under the review and appeals provisions in the ACNC Act.

ACNC Commissioner Susan Pascoe AM said an organisation was entitled to registration with the ACNC if it met the requirements set out in section 25-5 of the ACNC Act.

Registration entitles charities to apply for a range of Commonwealth charity tax concessions, including income tax exemption and GST concessions. Charities lose these benefits if their charity status is revoked.

The church is the fourth organisation to have its charity status revoked by the ACNC following an investigation or review. In June, the regulator revoked the registration of the Arthur Crawford Foundation and, in July it revoked the status of Care 4 Kids Foundation of Australia Limited and Indigenous Foundation of Australia Ltd, after ruling their operations were not solely charitable.

The ACNC’s Direction Notice says it received a complaint about The New Connection

Church Incorporated in January 2013 but by September 2013 much of the information sought by the ACNC had not been provided.

It says that between September 2013 and April 2014 the ACNC made numerous unsuccessful attempts to contact The New Connection Church Incorporated for

this outstanding information and then the church failed to lodge its 2013 Annual Information Statement, due on 31 March 2014.

The mobile phone number listed on the Church’s website is not connected. However, Pro Bono Australia News made contact with the Church’s Pastor Glenn Maloney who said he thought the decision was “a bit harsh” for the Church which has about 60 regular followers and has been operating for three or four years.

“A former Board member who has since left the Church set up the charitable status and our accountant took a long time to provide the information the regulator asked for,” he said.

“They said we breached the conditions but I didn’t really know what the conditions were. It’s just me and it seems too many people have been doing the books. We don’t even have a lease agreement with the building owner.”

Pastor Maloney agreed he was probably naive about the issues around charitable status but said their accountant had also been slow to respond.

When asked about the Church’s website and obscure information on the site about a local printing business, he said they had unsuccessfully tried to get rid of the page and a new website they had commissioned seemed to have disappeared.

ACNC Commissioner Susan Pascoe said that while, overwhelmingly, registered Australian charities were honest, professional and deserved public support, the ACNC acts where there is evidence of serious mismanagement or a breach of the ACNC Act, or if charitable assets or vulnerable people are at risk.

“In most cases we are able to work with charities to allow them to address any issues. The majority of complaints we have received during 2013-14 have been resolved with education and advice, or cooperative interventions where the ACNC has worked with the boards to rectify any concerns. This has resulted in improved practice,” Commissioner Pascoe said.

“The ACNC has received over 900 concerns about charities since starting operations in December 2012. While more than half of these are successfully resolved by the ACNC’s Advice Service, matters of serious concern are referred for further investigation.

“The top compliance issues under investigation are related to an inappropriate use of charitable funds, a lack of accountability to members, failure by responsible persons in their duties, and alleged involvement with criminal activity. The majority of concerns are raised by members of the public and by charities themselves.

“The ACNC has taken a range of actions where complaints have been authenticated. Where there is a cooperative disposition in the charity, we have worked with them on good governance practice such as improving record keeping or managing conflict of interests.

“We have encouraged some charities to engage professional advisers or to develop agreements to guarantee long-term protection of assets. We also work with other government agencies and share information with relevant intelligence and enforcement bodies.

“Where the charity has been reluctant to act, we have applied the ACNC’s enforcement powers including compelling information and material to be provided to us, issuing directions and warnings and issuing show cause notices.

“The ACNC has dealt with some very serious cases, and in the process protected hundreds of millions of dollars of charitable assets. Our confidentiality and privacy provisions prevent us from disclosing the detail of individual cases, but in its short life the ACNC has been able to address serious wrongdoing and contribute to national efforts to keep Australian communities safe and secure.”