AICD submission to consultation on developing a Not-for-Profit Sector Development Blueprint

Friday, 05 January 2024

On 20 December 2023, the AICD made a submission to the consultation on a developing a Not-for-Profit Sector Development Blueprint (the Blueprint).

First announced in October 2022, the Blueprint aims to provide a roadmap for Government reform and sector-led initiatives to boost the NFP sector’s capacity to support and connect Australian communities. The AICD strongly supports the development of the Blueprint to ensure a strong and effective NFP sector over the coming decade.

The key points in the AICD submission were:

  • The AICD has long advocated for promoting sound NFP governance practices, reducing the regulatory burden on NFPs and charities, and incentivising sector innovation and efficiency. The AICD strongly supports the objectives of the Blueprint Expert Reference Group (BERG) and the Blueprint. The NFP sector as a whole is underappreciated for its contribution to the community, including through delivering key services to all Australians. It faces considerable challenges in an increasingly resource constrained environment,
  • A comprehensive review, led by the Australian Law Reform Commission (ALRC), of the legal structures and frameworks that apply to the NFPs and charities in Australia is long overdue. The current complexity across both the Commonwealth and State legal frameworks increasingly appears outdated and unnecessary. Areas to be examined should include the differences in regulatory regimes and governance duties across registered charities, NFPs under state law, NFPs established as companies limited by guarantee and Corporations (Aboriginal and Torres Strait Islander Act 2006 (CATSI Act) organisations. The review should also examine the taxation framework in totality as it applies to NFPs and charities, including the deductible gift recipient (DGR) regime, of which the Productivity Commission recently recommended reforms to simplify the regime.
  • The AICD reiterates its call for increased stability in NFP funding arrangements through longer term contracts. This includes investment in internal governance and capacity building as a component of government and state funding agreements. Governments have a key role to play in supporting resourced constrained NFPs, particularly smaller volunteer run organisations, to build their governance, cyber resilience and digital capabilities. Supporting NFPs in these key areas will assist in protecting the often-sensitive information held by NFPs but also importantly empower the organisations to utilise digital assets to provide more effective services.
  • The AICD reiterates its strong support for the findings and recommendations of the 2010 Productivity Commission Contribution of the Not-for-Profit Sector Report. Very few of the recommendations have been fully implemented, including on improving data collection and building knowledge on effectiveness and excellence. These recommendations are even more relevant today where there is a greater focus on how NFPs and charities deploy their resources and demonstrate effectiveness.

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