At a time of year when Australia's charities and
not-for-profit organisations are busier than ever, they must now
consider the implications of the release of the report by the
Senate Standing Committee on Economics on its inquiry into the
governance, accountability and transparency of Australia's
charities and not-for-profit organisations.
After receiving submissions from 183 organisations and
individuals, the Committee has recommended sweeping changes to the
regulation of not-for-profit organisations designed to increase
transparency and accountability in the use of public and government
funds. These changes will have comprehensive and far-reaching
implications for the management of your not-for-profit organisation
or for your commercial dealings with such bodies.
The key recommendations from the report include:
the creation of a single independent national regulator for
not-for-profit organisations modelled on UK laws and responsible
administering a register for not-for-profit organisations with
a compulsory sign-up requirement and which would provide a range of
key facts and figures about the work and finances of each
securing compliance with relevant legislation
developing best practice standards
educating the public about the role of not-for-profit
that a single, mandatory, specialist legal structure be adopted
for not-for-profit organisations (after consultation with sector
participants) which would replace the widespread use of different
legal structures such as companies limited by guarantee,
incorporated associations, trusts, co-operatives, statutory
an examination of taxation measures affecting not-for-profit
organisations be included in the ongoing Henry Review of
Australia's future taxation system including the rules
governing the award of public benevolent institution (PBI) and
deductible gift recipient (DGR) status
the development of national fundraising legislation to replace
the current State and Territory-based regulation which may be
the adoption of a reporting and disclosure system with
differing levels of disclosure depending upon revenue thresholds
and with an emphasis on narrative and numeric reporting (not just
financial) given the breadth of stakeholders in such
The stated intention of these recommendations is to simplify,
co-ordinate and make consistent the various pieces of legislation
and regulation affecting the numerous types and sizes of
not-for-profit organisations throughout Australia. It was noted
that addressing the current complexity in the regulatory system
would likely improve transparency and may serve to improve
confidence in, and increase funding to, the sector.
While calls for change to the regulatory regime have been coming
from within the sector itself, not all groups in the not-for-profit
sector are supportive of the proposed reform. Opposition has been
made to regulatory reform on the basis that changes to disclosure
regimes may seriously disadvantage small organisations that may not
have the resources to comply with more onerous disclosure and
The Committee also recommend a Taskforce be established for the
purpose of implementing the recommendations of the report.
We will continue to monitor the progress of the Taskforce and
let you know of further developments.
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