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Charities update - 5 important developments

Native Title & Public Interest Law
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In this bulletin we update you on developments and announcements your charity should be aware of ahead of the New Year.

1. Whistleblower Protection Regime

In July 2019, the Australian Government introduced a new whistleblower regime to strengthen the protections available to people who expose wrongdoing in the corporate sector.  Our ABL commercial and corporate practice colleagues have provided details of the changes here

If your charity or not-for-profit is a company limited by guarantee, with an annual revenue or consolidated revenue over $1 million, it will need a whistleblower policy that complies with the Corporations Act. We can assist you to develop a compliant policy.

If your charity is an incorporated association, trust or a company limited by guarantee with an annual revenue (or consolidated revenue) under $1 million, this new requirement for a whistleblower policy does not apply.  ASIC has granted a specific exemption for companies limited by guarantee. See ASIC Corporations (Whistleblower Policies) Instrument 2019/1146.  

Importantly, all charities and not-for-profits that are trading or financial corporations will now have to comply with the corporate sector whistleblower protection regime outlined in Part 9.4AAA of the Corporations Act.   

2. Your Charity’s Annual Information Statement

If your charity has a reporting period that ended 30 June 2019, your AIS is due to be submitted on 31 January 2020.  The ACNC Commissioner has declared his intention to issue a blanket extension to the due date for the 2019 AIS for charities with an address for service in the areas affected by the recent NSW and Queensland bushfires. The extension will be to 31 March 2020. Check the ACNC website for postcodes to which this extension applies.
It is vital that you ensure the ACNC has the charity’s correct address for service so that important correspondence is not lost. Check your charity details on the ACNC website where the address for service is listed.
We encourage you to finalise and lodge your AIS as soon as possible. This year, more than 1200 charities were revoked for failure to loge more than one AIS.

3. Private Ancillary Fund Guidelines

The Private Ancillary Fund Guidelines 2009, as updated in May 2016 (2009 Guidelines), were automatically repealed on 1 October 2019 and replaced by the Taxation Administration (Private Ancillary Fund) Guidelines 2019.

The new guidelines feature simplified language, and consolidated and restructured provisions to improve clarity and consistency with current drafting practices. They do not change the substantiative meaning of the 2009 Guidelines.

One change you should particularly note is that Section 24 (Donors) has been amended to improve clarity and to ensure that the law operates as intended. In particular, the new provisions now ensure that after the founder’s death, a private ancillary fund can continue to donate and operate as a vehicle for a family’s private philanthropic purposes.

4. Charitable Fundraising

Don’t forget that fundraising for your charity is regulated state by state in Australia.  If you undertake charitable fundraising, you are likely to need to be licenced and/or registered in one or more Australian states.  

We share the views of many of you that there is a clear need for fundraising reform, for outdated laws to be repealed, and for a consistent, appropriate national approach to the regulation of charitable fundraising. It is clear that we do not have such a system yet. Each state and territory has different requirements and different exemptions. 

The ACNC has produced an overview here. You can also review the requirements with each state or territory fundraising regulator. 

5. Watch this space

We are also keeping an eye on upcoming developments affecting the sector, including:

  • It has been more than a year since the ACNC Review was tabled in parliament. We keenly await the Minister’s response and remain hopeful that many of the reasonable, recommended amendments will be taken up by the government.
  • The DGR reforms announced on 5 December 2017 are still not enacted.New draft legislation has been promised by Treasury with the official start date of the reforms still slated for 1 July 2020.

  • The Currency (Restrictions on the Use of Cash) Bill 2019 which passed the House of Representatives earlier in the year was referred to the Economics Legislation Committee for inquiry.  The Committee’s report is due by 7 February 2020. If the Bill becomes law it will become unlawful to make or receive cash payments, including gifts, of $10,000 or more. 

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