2 October 2017

Registered Charity Tick – But What is the Cost of Being Ticked-Off?

Greg Moroney
Greg Moroney Commercial Lawyer

The Australian Charities and Not-for-Profits Commission (ACNC) has introduced a rating system in an attempt to improve administration in Australian Charities. The ACNC’s Tick of Charity Registration or Registered Charity Tick comes after charitable institutions called for a logo to show their charitable status and their compliance as an ACNC registered charity.

The tick of approval is meant to let donors know if a charitable organisation is financially sound and provide a “visible badge of credibility” as a registered charity meeting financial reporting guidelines and governance standards.

But figures released from the ACNC show nearly 15,000 charities have been deregistered for failing to report since the ACNC regulator started in December 2012 and there are indications that the regulator is struggling to cope.

Of those 15,000 charities, ACNC reports 450 organisations have been revoked in 2016 for not submitting the required paperwork for more than two years.

A further 3,239 charities have been flagged by the ACNC for being more than six months behind in their reporting requirements.

But charities in the unfortunate position of having their charitable status revoked are finding the process of re-registering a charity with ACNC to be both onerous and a very lengthy process.

One charity Bennett & Philp Lawyers has recently advised has reportedly taken many months to fulfil the formalities required by the ACNC. The charity, which registered with the ACNC online in 2012, found itself repeatedly locked out of the online reporting portal and forced to continually ask for access to the ACNC charity portal via protracted telephone calls, time-consuming security checks and challenges to complete further requests made by the ACNC.

A spokesperson for the charity in question was vocal in flagging that charities are invariably run by unpaid volunteers and the burden placed on those members of the community by the ACNC needs to be reviewed. Unquestionably volunteers give their own time, often holding down full-time jobs in parallel or who are older people trying to enjoy their retirement years, in serving the needs of the general public. The spokesperson said volunteers do not give their own time to have protracted dealings with governmental red tape.

Despite being a fully compliant charitable organisation, which promptly signed up with the ACNC in 2012, the problems faced by volunteers in dealing with the online portal “lock-outs” to fulfil the necessary reporting requirements – has created 10 months in a vacuum for this 32-year old charity.

The charity spokesperson reported ACNC staff has indicated revoked charities do not have any priority in re-registration order, that new charities have preference over re-registrations of established charities and that the goal posts on the time for re-registrations keep changing – first to a matter of weeks, then to 1 month, then to months and in late January 2017 ACNC staff were unable to provide any expected timeframe for completion of
charitable re-registrations.

With some 2,500 charities applying to use the Registered Charity Tick, it appears that the ACNC’s resources are severely stretched.

 

 


Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).

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