Charities Encouraged to Have Their Say on ACNC Review

Charities have been encouraged to make a submission to the review of the Australian Charities and Not-for-profits Commission legislation, as newly published submissions reveal a growing concern about potentially adding new objects to the ACNC Act.

The Australian Charities and Not‑for‑profits Commission Act 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Act 2012, which sets the framework for the charities regulator, are required to be reviewed after five years of operation.

Assistant treasurer Michael Sukkar announced the terms of reference for the review in December last year, and the review has now commenced with submissions due by 28 February.

Review panel chair Patrick McClure, encouraged charities and not for profits to have their say by making a submission.

“We are asking charities and not for profits to share their views on how to improve the sector and ensure that the objects of the ACNC are fit for purpose,” McClure said.

“This is a real opportunity for the sector to submit their ideas on the effectiveness of the existing regulation and what more can be done to achieve an efficient and transparent regulatory framework.”

The review will allow charities and NFPs to evaluate the performance of the ACNC’s legislative framework and the regulation governing the sector, to identify any improvements that can be made.

“It is important for interested parties to have their say on the ACNC legislation so the review can provide the government with fully informed opinions and recommendations for future regulation and appropriate reforms,” McClure said.

The panel has also launched a review website, which will publish submissions as they are received.

PricewaterhouseCoopers (PwC) has been appointed as the review secretariat, and are able to take comments on submissions.

Interested in the review of @ACNC_gov_au legislation? Website for the Review has now been set up and some of the submissions published https://t.co/1KC01U3Nxf #NFP #charity #charitycommission #NGO #NPO # regulation

— David LockeACNC (@DavidLockeACNC) February 20, 2018

The ACNC’s own submission to the review was met with concern from the charity sector, after the national regulator said the review panel should consider adding two new objects to the ACNC Act.

These new objects were: “to promote the effective use of the resources of not-for-profit entities” and “to enhance the accountability of not-for-profit entities to donors, beneficiaries and the public”.

But in a submission provided to Pro Bono News, the ACNC’s independent advisory board warned that no changes were needed to the legislation.

Professor Ann O’Connell from Melbourne Law School at the University of Melbourne, also advised against adding new objects to the ACNC Act in her submission.

“In my view, there is no need for an object that gives the commissioner such powers,” O’Connell said.

“The proposed recommendation both duplicates the current objective relating to ‘public trust and confidence’ and is also potentially in conflict with the objective relating to ‘reduction of unnecessary regulatory obligations’.

“The government has indicated that it will not impose restrictions on environmental charities engaging in advocacy and there does not appear to be any reason to interfere with the use of resources by charities in this way. If the ACNC believes that there is malfeasance they have sufficient powers to deal with any wrongdoing.”

Dementia Australia’s submission asked for further clarity on the terms used in the proposed new objects.

“While we understand the intent behind these objectives, it is important that their implementation does not contradict or undermine the existing objectives of the ACNC, such as the reduction of unnecessary regulatory obligations on the Australian not-for-profit sector,” the submission said.

“Further clarity is also required on how and who would be able to meaningfully assess how a charity is ‘effectively’ using its resources and how ‘misconduct’ might be defined.

“For example, while Dementia Australia’s advocacy is under no circumstances political in nature, our role does charge us with the responsibility to advocate for our vulnerable consumers, especially where existing government policy is failing to meet their needs.

“We therefore seek clear articulation of the issues being explored as part of this review, along with thoughtful, targeted definitions of ‘effectiveness’ and ‘misconduct’.”

The Shepherd Centre said while it supported the vast majority of recommendations from the ACNC’s submission, it did not support adding new objects to ACNC legislation.

“Effectiveness and accountability are both critical for not for profits, however the likely outcome from introducing measures like this will be increased restrictions [and] reporting, which are far more likely to increase costs and thus decrease benefits,” The Shepherd Centre’s submission said.

But ACNC commissioner Gary Johns defended the potential new objects in his commissioner’s column on the ACNC website.

“These recommended objects are not designed to create restrictions or impose limitations on charities. They are not additional enforcement powers, but rather a mandate for the ACNC to support and promote effective and efficient use of resources,” Johns said.

The review panel will provide a report to the federal government by 31 May 2018.