Running a charity
Presented by:
Chris Riches and April Kitchenham
23 May 2017
What we will cover today
 Charity obligations to the ACNC
 ACNC governance standards
 Duties of responsible persons
 Good governance principles
 Q&A
Who runs a charity?
Your responsible persons are the people who
are responsible for governing your charity.
Generally, responsible persons are:
• board or committee members
• trustees, or
• directors
acnc.gov.au/responsiblepersons
Charity obligations to the ACNC
 Maintain charity status
 Keep records
 Report annually (AIS)
 Notify us of changes
 Meet governance
standards
acnc.gov.au/ongoingobligations
charity.acnc.gov.au
The ACNC Governance Standards
Charities must meet a set of core, minimum standards
that deal with how charities are run
1
Purposes and not-for-profit nature of a charity
2
Accountability to members
3
Compliance with Australian laws
4
Suitability of responsible persons
5
Duties of responsible persons
acnc.gov.au/governancestandards
Duties of responsible persons
1
Act with reasonable care and diligence
2
Act honestly and fairly in the best interests of
the charity and for its charitable purposes
3
Do not misuse your position as a responsible
person
4
Do not misuse information you gain in your
position as a responsible person
5
Disclose conflicts of interest
6
Ensure that the financial affairs of the charity
are managed responsibly, and
7
Do not allow the charity to operate while it is
insolvent
Duty #1
ACT WITH REASONABLE CARE AND
DILIGENCE
 Know your obligations and understand
them
 Stay informed about the charity
 Prepare for and attend board meetings
 Participate actively in meetings and
discussions
 Ask questions and seek advice if needed
Duty #2
ACT HONESTLY AND IN THE BEST
INTERESTS OF THE CHARITY
 Decisions must be
made from the
viewpoint of the
charity’s best
interests
 To further its work and
charitable purposes
Duty #3
DO NOT MISUSE YOUR POSITION AS A
RESPONSIBLE PERSON
 Act in the charity’s best interests
 Do not misuse your role to improperly provide
benefits for yourself or others
Duty #4
DO NOT MISUSE INFORMATION
OBTAINED IN YOUR DUTIES
 Confidential information must remain “inhouse”
 Only to be used for the purposes of acting as a
board member
Duty #5
DISCLOSE ANY ACTUAL OR PERCEIVED
CONFLICTS OF INTEREST
 Be aware of any interests you have that could
influence you as a board member
 Disclose any conflicts of interest
 Ensure there is a policy on conflicts of interest
 Maintain a register of interests
?
Does my charity have a process to manage
conflicts of interest when they arise?
Duty #6
RESPONSIBLE MANAGEMENT OF
CHARITY’S FINANCIAL AFFAIRS
 Read your charity’s financial statements
 Ask questions if you don’t understand something
 Consider how any decision you make could
impact on your charity’s financial health
 Know whether your charity is solvent
?
Do I understand my charity’s financial position
and how my decision will affect it?
Duty #7
NOT ALLOW A CHARITY TO OPERATE
WHILE INSOLVENT
Cash
Due
debts
Insolvency is when your
charity cannot pay its debts
as and when they are due
Good governance
Governance refers to the
processes, activities
and relationships that
help ensure your charity
is effectively and
properly run.
Meetings
 Meetings are a way to be kept informed of your
charity’s activities and vote on decisions
 Refer to your governing document and relevant
legislation regarding how you hold your meetings
 There may be legal requirements for:




Providing notice
Meeting quorums
Voting rights
Keeping and storing minutes
Meetings and agendas
 An agenda is a list of items that will be discussed
during the meeting
 It is a good idea to send the out the agenda well
in advance so participants have a chance to read
and prepare themselves for the meeting
 Can include:
 who will address each item
 Time allocated for discussion/decision on each item
 recommendations for action
Annual General Meetings
 Meeting held once a year that all members of a
charity are invited to attend
 Members are given a report on the charity’s
activities and finances for the previous year
 Check your charity’s rules or any legislation that
applies to your charity to find out whether you
must hold an AGM and what you have to do
 Good opportunity to make changes through
voting, ask questions and discuss the direction of
the charity
Governing Documents
 Can be called Rules, Constitution, Articles of
Association, Trust Deed, etc.
 Must include:
 Object or purpose
 Not-for-profit basis, including information on winding up
 May include:




Membership rules
How the organisation makes decisions
How meetings are held
Appointment and powers of “responsible persons” on the
governing body (committee of management or board)
 DGR clause (if applicable)
Board inductions and
handovers
 A properly inducted board member is a quickly
productive board member
 Ensure there are adequate and documented
handover processes
 Consider developing a board member “welcome
pack” including key documents and processes
 Ensure the new person is aware of their charity’s
obligations, including to the ACNC
Managing conflicts of interest
Your
charity
Conflict
Other
interests
Responsible financial
management
You must have a
basic level of
financial literacy to
make informed
decisions
Keep records
Your charity needs to maintain:
Operational
Records
Financial
records
• Record and explain what
your charity has done (its
activities)
• Record and explain your
charity’s financial position
and any transactions
• For example: annual
reports, meeting agendas
and minutes, operational
plans, reports from
events, client records etc.
• For example: financial
statements, cash flow
statements, bank
statements, details of any
contracts, leases etc.
acnc.gov.au/recordkeepingchecklist
Responsible fundraising
 The responsible persons are, collectively,
responsible for the way a charity conducts its
fundraising
 How a charity conducts its fundraising is an
important part of a successful strategy and is
crucial to its reputation
 Fundraising does not fall under the jurisdiction of
the ACNC and is instead regulated on a state-bystate basis
Internal disputes
 Involves disagreements between groups or
individuals within a charity
 Refer to your charity’s governing documents or
policies outlining dispute resolution procedures
 Discuss the issue with the person/s in question
and the responsible persons of your charity
 Ignoring internal disputes can harm a charity
 Consider using a professional mediator or
another impartial advisor
 The ACNC does not mediate internal disputes
Staff and volunteers
 Charities employ over 1.2 million staff – 10% of
Australia’s workforce
 Four out of five charities engage volunteers – 3
million volunteers overall
 Important that employees and volunteers are
looked after
 Have adequate policies, procedures and
inductions in place
More information
► acnc.gov.au/ongoingobligations
► acnc.gov.au/governancetools
► acnc.gov.au/responsiblepersons
► acnc.gov.au/governancestandards
► acnc.gov.au/reporting
► acnc.gov.au/recordkeeping
► acnc.gov.au/governingdocument
► acnc.gov.au/AGM
► acnc.gov.au/fundraising
► acnc.gov.au/money
Stay in touch
 Commissioners Column and email updates
 Web guidance, video content, webinars
 13 ACNC (13 22 62) 9.00 am – 6.00 pm AEST
 [email protected]
facebook.com/acnc.gov.au
@acnc_gov_au
youtube.com/ACNCvideos
Thank you
View this webinar, check the topics of upcoming
webinars, and register at acnc.gov.au/webinars
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