Not-for-profit entities are significant players in areas including community services, health, education, the arts, sport, the environment, housing, legal services and employment. They also represent the interests of disadvantaged sectors and communities such as Aboriginal and Torres Strait Islanders.

The establishment of the Australian Charities and Not-for-profit Commission (ACNC) signals the Commonwealth Government’s commitment to working collaboratively with the not-for-profit sector to facilitate the not-for-profit sector’s day to day operations and hard work.

As Commonwealth grant programs or provision of ad-hoc grants often involve provision of funding to notfor- profit entities, the Commonwealth Government’s move toward working more closely and collaboratively with the not-for-profit sector has particular significance for Commonwealth agency staff involved in the administration of grants.

Establishment of the ACNC

The ACNC is a new independent statutory body set up by the Commonwealth Government to regulate charities. Initially, the ACNC will apply to charities only (this includes public benevolent institutions and health charities). However, it is the Government’s intention that eventually ACNC will also regulate other types of not-for-profit organisations.

The ACNC was set up to achieve the following objects:

  • maintain, protect and enhance public trust and confidence in the notfor- profit sector through increased accountability and transparency
  • support and sustain a robust, vibrant, independent and innovative not-for-profit sector, and
  • promote the reduction of unnecessary regulatory obligations on the sector.

In particular, the ACNC:

  • registers organisations as charities
  • helps charities understand and meet their obligations through information, guidance, advice and other support
  • maintains a free public ACNC Register that allows anyone to look up information about registered charities, and
  • will allow charities to report once to government.

To reduce unnecessary regulatory obligations and implement a ‘report once, use-often reporting framework’, the ACNC administers a ‘charity passport’, which is a collection of data that charities will only have to deliver once. The charity passport will be used by the ACNC to reduce reporting duplication over time. It is not a paper document, but a way of sharing and using information it collects from registered charities. The charity passport will contain certain information from the annual information statement, along with information from other sources such as registration details, data sourced from the ATO and other documents lodged with the ACNC.

The establishment of the ACNC represents the Commonwealth Government’s emphasis on the importance of the not-for-profit sector and forms part of the overall reforms to facilitate the work performed by not-for-profit entities. Those reforms include removing regulatory red tape, clarifying eligibility for not-for-profit tax concessions and streamlining funding agreements and reporting requirements. To implement the reforms new Commonwealth Grant Guidelines have been published and a new simplified grant agreement template for low risk grants has been piloted.

What the establishment of the ACNC means for Commonwealth Government agency staff

The establishment of the ACNC is a positive development for both notfor- profit entities and Commonwealth agencies. Agencies should begin preparations for the new changes heralded by the establishment of the ACNC. Agencies should:

  • review and revise Chief Executive Instructions and internal policies and guidance material to reflect the establishment of the ACNC and other reforms
  • update risk assessment processes and templates to assist in determining whether a grant is ‘low risk’
  • review and revise grant agreement templates to reflect the Commonwealth Grant Guidelines and, if applicable, the new grant template being piloted by the Department of Finance and Deregulation, and
  • provide training on working with the ACNC and in accordance with the new Commonwealth Grant Guidelines.