Charities Lose Status Following ACNC Investigation
12 March 2015 at 9:46 am
Three Queensland organisations have lost their charity status following separate investigations by the national charity regulator which found serious breaches of conduct.
The Australian Charities and Not-for-profits Commission (ACNC) announced today that it had revoked the registration of three charities, finding they were not operating in accordance with the ACNC Act and Regulation.
Young People for Tomorrow Ltd, the First 24 Hrs Foundation and Mununjali Traditional Custodians Ltd were all deregistered.
All three organisations were based in Brisbane.
While the ACNC says it cannot reveal exact details of why the charities were deregistered, the actions relate to subsection 35-10(1)(c) of the Act. Potential reasons include providing “information that was false or misleading” or if the charities had “not complied with a governance standard or external conduct standards”.
ACNC Commissioner, Susan Pascoe OAM, said the regulator took a proportional approach to to compliance activity, while maintaining a commitment to protecting public trust and confidence in the sector.
“Revocation of charity status is reserved for the most serious of cases,” Pascoe said.
“We prefer to educate charities and support them to improve where appropriate. However, we will act firmly and quickly where there is evidence of serious mismanagement or misappropriation, a serious, persistent or deliberate breach of the ACNC Act, or where vulnerable people or significant charitable assets are at risk.”
But Eddy Andrews, CEO and founder of the First 24 Hrs Foundation, which aims to improve disaster and emergency response preparedness, told Pro Bono Australia News that he was already working to get the charity status of his organisation reinstated.
“We’re just going through a restructure at the moment,” Andrews said.
“We had some volunteers that were doing some work for us, we know there were some irregularities, no money has been misappropriated or anything like that, it’s just some of the procedures need to be tightened up.
“So we’re going through a restructure and as indicated to the ACNC yesterday we will be resubmitting how we get back on board.”
It is the second charity connected to Andrews that has had its status revoked.
In January this year the Foundation of Public Safety Professionals lost its charity status because it did not meet any of the ACNC’s reporting obligations.
Andrews said he had not yet been informed of why First 24 Hrs, which benefited from tax concessions for GST and income tax since it was established in 2010, had lost its charitable status.
“We received a phone call yesterday afternoon and that was it. We haven’t got any formal documentation or anything they’ve just deregistered it. There’s been some correspondence backwards and forwards,” he said.
“Yes we are disappointed. We just want to make sure that we’re doing everything properly.
“We’re confident that everything will be sorted out and we’ll put more rigorous systems in place and we just want to make sure that there’s no loopholes that we’ve identified.”
Andrews said that First 24 Hrs was a private charitable trust and it had not received public donations for about 12 months.
He said it was still providing disaster preparedness information to the public and he expected it to have its charitable status returned.
“We identified this long before the ACNC got involved,” he said.
“It was just an administration loophole. Procedures just weren’t being followed by some of our volunteers. We identified that, we sought legal advice and the legal advice was that we fix this.
“We’ve been in the process of doing that before the ACNC became involved.
“We’re still about disaster and emergency preparedness. Disasters still don’t discriminate and there’s a real need for the community to be better prepared for disasters and emergencies.
“We’re confident that the new system will meet and exceed the expectations of the ACNC.”
A spokesperson for Young People for Tomorrow, who identified himself as Father James, told Pro Bono Australia News via email that the organisation had in fact requested that it be deregistered.
The charity, which served the homeless and poor in Brisbane’s CBD, previously benefited from Deductible Gift Recipient status as well as tax concessions for GST, income tax and fringe benefit tax since it was established in 2010.
“…two of the Directors requested it many months ago after an ongoing stalemate with the Treasurer-Director. Our request to revoke back in October was refused politely by the ACNC [due to] regulations they operate under,” Father James said.
“Of course, the Directors have had constant communication with the ACNC for many months.
“I have ceased publicly advertising the charity from the day after I received the notification to revoke. The two (small) regular donors were informed in writing by me that from the 28th February (or thereabouts) Gift Recipient Status was going to be revoked and both were advised to cease donating, which they did. However, they now privately support myself.”
Pro Bono Australia News was unable to contact Mununjali Traditional Custodians Ltd, which benefited from tax concessions for GST, income tax and fringe benefit tax since 2011.
The charities have 60 days to lodge an objection to the ACNC’s decision.
The ACNC has received over 1300 complaints against charities since it was established over two years ago.
The ACNC said the majority of these complaints have been resolved through education and advice.