Australian Charities and Not-for-Profits CommissionOne stop Shop – Open for Business

3 December 2012Murray Baird

Assistant Commissioner General CounselAustralian Charities and Not-for Profits Commission

Commentary by Vera VisevicPartner Charity & Not-For-Profit

Mills Oakley Lawyers

An Australian Charities Commission

a new independent statutory agency, the Australian Charities and Not for profits ‑ ‑Commission (ACNC), by 1 July 2012 and related structural changes required to the Australian Taxation Office

Federal Budget May 2011

ACNC starts today

Slow Train Coming• 2001 Definition of Charities

• 2008 Disclosure Regimes for Charities and NFP Organisations

• 2010 Productivity Commission : Contribution of the Not-for Profit Sector

• 2010 National Compact

• 2010 Henry Review

• 2010 Senate Economic Legislation Committee inquiry

Reform Agenda

•Office for the Not-for Profit Sector – to drive and coordinate reform

•Not for Profit Reform Council – advice to Government on Reform

•ACNC - Regulator

•Public Ancillary Fund Reform

•Unrelated Business Income Tax

•“In Australia” test

•Statutory definition of Charity

•Social Enterprise Development and Investment Fund

•National Disability Insurance Scheme

•Many more…

Who is in?

• Welfare and disability;• (Non Government) Schools, Universities

etc;• Churches, Religious organisations• Conservation, Arts, Childcare

Who will the ACNC regulate?

• Existing charities that currently access Commonwealth tax concessions

• Existing and new charities that want to apply for Commonwealth tax concessions and other benefits

• 56,000 charities, 10% of broader NFP sector

• Possibly other types of NFPs but not before 2014

Trust

Maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector.

Health

Support and sustain a robust, vibrant, independent and innovative Australian not-for-profit sector

Cut Red Tape

Reduction of unnecessary regulatory obligations on the Sector

What will ACNC Do?Registration

Information

Compliance

Education and guidance

More work to be done

• Governance Standards by 1 July 2013

• Financial Reporting for year ending 30 June 2014

Withholding Information from Register• Commercially sensitive;• Detriment to entity or individual;• Inaccurate, confusing, misleading,

offensive; dangerous;• Prescribed by regulation – could be

made for Private Ancillary Funds to protect private donor privacy

Size does matter

• Small : annual information statement

• Medium: financial report – audited or reviewed;

• Large: financial report audited

Governance

• The process to ensure that an organisation achieves its mission

• Steering and Stewarding• Registered charities will meet

governance standards;• Principle based, not rule based;• Good practice guidance;• Proportionate

Regulatory Approach• Light-touch, risk-based, evidence-based approach• Provide information, guidance and education• Use graduated powers, provide opportunity for

self-correction• Regulatory Principles: relevance, proportionality, consistency, transparency, timeliness.

Guidance

Assistance

Investigation

Graduated Sanctions

Deregistration

Education and guidance

Public Register

• ACNC• Registration of charities (including Public Benevolent Institutions)

for Commonwealth purposes from 1 October 2012• Establish Reporting Framework and Information Portal• Work with Commonwealth, State and Territory agencies to

consolidate reporting and reduce compliance burden

• Australian Tax Office – Non-Profit Centre• Endorsement for tax concessions

– Income Tax exemption – Deductible Gift Recipient (DGR)– Fringe Benefits Tax exemption or rebate– GST Concessions– Refund of franking credits

Relationship to ATO

What will charities need to know and do on Commencement?

Charities that were registered with the ATO prior to commencement do not need to take any action unless:

• They wish to opt out of registration on the approved form by 1 March 2013.

• Religious institutions may wish to register or register as a sub-type.

Where to from here

• December 2012

• ACNC begins operation – registering new charities

• July 2013

• First annual (non-financial) reports start to be collected

• Financial reporting and governance standards

• Information Portal – for charities and public

• Statutory Definition work to commence

Thank you

Email:Murray.baird@acnc.gov.au

Website:acnc.gov.au