Australia’s not-for-profit (NFP) sector is undergoing a period of unprecedented change in its regulatory, funding and operational environments. In this context, good governance has never been more important for NFPs. The AICD is committed to advocating on behalf of the sector to ensure that public policy provides a solid foundation for NFP boards to achieve good governance.
Charities’ Annual Information Statement
The Australian Charities and Not-for-profits Commission (ACNC) has consulted on the form of their 2017 annual information statement (AIS) – the standard reporting template for registered charities. Many of the changes are intended to clarify questions and make the process for collecting information clearer and simpler.
In our submission, we raised concerns about a number of proposals which were poorly-designed, would increase regulatory burden and which may have been outside the ACNC’s regulatory powers to collect. Many of these changes have been proposed before the impact of earlier changes to the AIS have been recognised, meaning the suggested amendments were not appropriately evidence-based. Disappointingly, of these changes will be introduced in the final version of the AIS.
One of the proposals would have required AIS preparers to make a declaration that the charity was compliant with the ACNC’s five governance standards. The AICD put forward the view that such a declaration would be difficult, if not impossible, for a preparer of the AIS to make and would create excessive and unnecessary regulatory burden for the sector. Further, the requirement would have been inconsistent with the ACNC’s stated regulatory approach and with the intent of its enabling legislation. The ACNC ultimately did not go forward with this proposal.
The AICD is a signatory to the joint statement on fundraising reform and a partner in the ongoing work of the coalition of leading sector bodies that have released the statement. Through this statement, we are calling on Australian governments to work together to provide charities and NFPs with a nationally-consistent and fit-for-purpose regulatory regime. We propose a simple way to provide a better framework for fundraising – clarifying the application of the Australian Consumer Law (ACL) and repealing existing inconsistent and out-of-date state and territory regimes.
In support of this campaign, the AICD has provided submissions to two concurrent consultations:
- The Australian Government Productivity Commission’s enquiry into Consumer Law Enforcement and Administration; and
- Consumer Affairs Australia and New Zealand’s interim report on the review into the ACL.
Through these consultations, the AICD has prosecuted the view that the ACL should be used as a foundation to establish a nationally-consistent regulatory framework for fundraising.
Encouragingly, the interim report released by Consumer Affairs Australia and New Zealand specifically contemplates the clarification of the ACL as it applies to fundraising, including with reference to how this clarification would facilitate reforms at the state and territory level.
This is a significant achievement for the work of the coalition working to achieve fundraising reform.
The review is now in its final stages and the success of the reform will hinge on the support of state and territory governments, and the Australian Government.
We encourage you to join the campaign to fix Australia’s fragmented and out-of-date regulatory regime for fundraising by adding your name to the list of campaign supporters.
Australian Government Social Impact Investing Discussion Paper
The AICD has provided a submission to an Australian Government discussion paper which explores potential roles for the government in supporting and promoting social impact investing.
Our submission addresses the regulatory and governance environment in which NFPs operate as it relates to social impact investing and how the Australian Government could facilitate such investment through:
- Reducing the regulatory burden on NFPs (which is costly and, as a result, reduces the potential of social impact investments to achieve market returns);
- Providing guidance on the operation of an Australian social impact investing market, including on how such investments relate to NFP status and tax; and
- Supporting the development of social impact measurement.
Of critical importance to our submission is our view on whether a legal impediment exists that prevents directors of social enterprises from making decisions in accordance with the constitutional mission of the enterprise, rather than maximising financial returns.
The AICD considers that there is no such legal impediment, and that the law already provides flexibility for directors to consider and balance the interests of a range of factors in their decision-making, in furtherance of an enterprise’s mission.
Read our submission on the Social Impact Investing Discussion Paper.
Research on the National Standard Chart of Accounts
The National Standard Chart of Accounts (NSCOA) is a free data entry tool and data dictionary for charities and other NFP organisations. All Australian governments (Commonwealth, state and territory) have agreed to accept NSCOA when requesting information from NFPs.
The ACNC is currently conducting research regarding the level of awareness, use and value of the NSCOA by NFP organisations, as well as any challenges or benefits of adopting the NSCOA that users have identified.
The ACNC is seeking feedback from NSCOA users, as well as professional advisers and accountants, funders and grantmakers, and government agencies.
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