Australian Charities and Not-for-profits Commission

(ACNC) Community Consultation

Susan Pascoe (AM) Interim Commissioner & Head of ACNC Implementation Taskforce

PART 1•Not-for-profit reform•ACNC Taskforce - its priorities, approach and timelines•Australian Charities and Not-for-profits Commission (ACNC) – its purpose, establishment and transition arrangements •Roundtables – some issues raised•Your questions and feedback

Overview

PART 2•What does it mean for you?

Registration Reporting

» All entities» Additional reporting medium and large entities» Additional reporting large entities

Information Portal Education and Guidance

•Your questions and feedback

Overview

• Economically significant sector• Socially significant – key source of social capital• Key priority for Government

service delivery reform, increased participation improved social inclusion

• Improve Government and NFP sector interaction• Streamline and simplify regulation• Promote long-term sustainability of the NFP sector

Why NFP Reform?

Employment per sector 2006/7 Average annual growth 2006/7 and 2009/10

Sources:ABS, Australia Industry 2004/5, 2005/6, 2006/7, 2007/8, 2008/9, 2009/10ABS, Australian National Accounts, Non-profit Institutions Satellite Account 1999/2000, 2006/7

* NFP 2009/10 estimated on average annual growth rate from 1999/2000 to 2006/7

2006/7

2009/10 estimate

2006/7

2009/10

Million

-1.2%

7.2%

5%+

2.9%

-1.7% 0.7%

The economic influence of NFPs

Importance of the NFP sector

The call for reformPast reviews

6

Past reviews and National Compact

• Positive impact on health, education & environment, even foreign policy

• Improved social capital that shapes economic and social opportunities

• Increased source of social and economic innovation• Improved government service delivery• Underpins greater participation, social inclusion,

support of vulnerable people, welfare, education• Greater trust in the sector

Benefits of NFP Reform

• PM&C – Office of the NFP Sector National NFP Reform Council - Secretariat Oversight social inclusion agenda National Compact Manage National Volunteering Strategy

• Treasury - Policy development and legislation Australian Charities and Not-for-profits Commission Bill Better Targeting of NFP Tax Concessions & ‘in Australia’ requirements Statutory definition of charity Reviews of

» Governance arrangements» Fundraising regulation» Companies Limited by Guarantee

Where do we fit?

• Australian Tax Office – Non-Profit Centre Endorsement for tax concessions

» Income Tax exemption » Deductible Gift Recipient (DGR)» Fringe Benefits Tax exemption or rebate» GST Concessions» Refund of franking credits

• ACNC Registration of charities (including Public Benevolent Institutions)

for Commonwealth purposes from 1 July 2012 Establish Reporting Framework and Information Portal Work with Commonwealth, State and Territory agencies to

consolidate reporting and reduce compliance burden Work to Assistant Treasurer Mark Arbib who reports to Treasurer

Where do we fit?

O ff ice fo r th eNo t - fo r-pro f it

S e cto r( P M C )

R e sp o nsib le fo r p ro g re ssin g3 8 P rod u c tiv ity Co m m issio n

re c om m e n d a tio n s

I n te rde pa rtm e n ta l C o m m it t e e( I D C ) o n

NFP S e cto r R e fo rmS ecretari at : O ffice fo r N F P S ecto r

NFP S e cto r R e fo rm C o u n cilC h a ir : L in da L a v a r c h

M in is te r fo r S o cia l I n clu s io nM ar k Bu tle r

C o u n cil o fA u s tra lia n

G o v e rn m e n ts(CO A G)

C h a ir :P r im e M in ist e r

CO A G L e gisla t iv ea n d Go v e r n a n c e

F o r um o nC o n sum e r A f f a ir s

( C A F)Se c r e ta r ia t: T r e a su r y

- F u n dra isin g - S C O A

A u s tr al ianC h ar i ti e s an dN ot-for -pr ofi ts

C om m is s ion(A C N C )

fro m 1 J u ly 2 0 1 2

Tre a s u re rW ay n e S w an

A s s is ta n t Tre a s u re r M ar k Ar b ib

Pa rlia m e n ta ry S e cre ta ryD av id Br ad b u r y

A C NC A dv is o ryB o a rd

1 July 2 0 1 2C h a ir : R o be r t F it z ge r a ld

N o t-fo r-pro fit C o nsulta tio n C o nc e ptua l M a p

T h is d iagram is fo r i l lu s tra t ive purposes on lyP rep ared b y E rin F ly n n , A C N C Im p lem en tat io n T as k fo rceD ata s o u rced fro m th e O ffice o f th e M in is ter fo r S o cial In clu s io nan d th e O ffice fo r th e N o t -fo r-P ro fi t S ecto r 1 2 D ecem b er 2 0 1 1

A u s tra lia nTa x a t io n

O ff ice( A T O )

C o m m iss io n e r :M ic h a e l D ' A sc e n zo

Tre a s u ryN F P

P o lic y A re a s

P rim e M in is te rJ ulia G illa rd

C h ar i ti e s C on s u l tativeC om m itte e (CCC)

C l u b s C o n s u l t a t i ve Fo r u m( C C F )

A CN C Imp le me n ta t io n S te e rin gCo mmit te e

( C h a ir : B r u c e Q u ig le y )

K EY O r a n g e - N FP S e c t o r G r e e n - A C N C

N o t-fo r-p ro fit W GS ecretari at : T reas u ry

N ationa l def in i t ions o f 'cha r ity' and'ch ar itab le activi t ies '

S tandard ised N F P repor ting

M e a sur e m e n t a n d I n f o r m a t io n W GS e c r e ta r ia t: A B S

S t re a mlin e d Gra n tA rra n g e me n t s W G

S e c r e ta r ia t: F in a n c e

P e rfo rma n c e R e p o rt in g W GS e c r e ta r ia t: P M C

Gra n t A g re e me n t a n dP ro c u re me n t C o n t ra c t s W G

S e c r e ta r ia t: F in a n c e

R e d u c in g D u p lic a t io n o fR e g u la t io n W G

S e c r e ta r ia t: T r e a su r y /A C N C T

A C NCI m ple m e n ta t io n

Ta s k fo rceC h a ir : Susa n P a sc o e

S tan d in gC o u n c il o n

F ed er a lF in an c ia lR ela tio n s( S C F F R )

Se c r e ta r ia t: T r e a su r y

C o m m u n ity C o u n cil fo r A u s tra lia ( C C A)C E O : D av id C ro s b ie

C h ai r: R ev T im C o s tel lo

Na t io n a l R o u n dta ble o f No n pro f itO rg a n is a t io n sC E O : G erard M en s es

A u s tra lia n C o u n cil o f S o cia l S e rv ice( AC O S S )

C E O : D r C as s an d ra G o ld ie

NFP S EC TO R B O D I ESin c ludin g

Re d T a p e Re d u c t io n W GC h air: F ran k Q u in lan

F u tu re N F P W o rkfo rc e W GC h air: K as y C h am b ers

N a t io n a l Re g u la to r W GC h air: S u zie H azleh u rs t

Be t te r T a rg e t in g T a x Co n c e s s io n sW G

C h air: A n n e R o b in s o n

N a t io n a l Co mp a c t a n d o th e rre fo rms W G

C h air: D av id C ro s b ie)

N A T I O N A L C O M P A C T

• ACNC Taskforce establish ACNC to regulate charities• Implement a statutory definition of charity for all

Commonwealth purposes from 1 July 2013• Work with the states and territories through COAG NFP

Working Group to progress effective regulation of the NFP sector

• Better target NFP tax concessions• Restate and standardise the special conditions

applying to tax concessions (incl ‘in Australia’)

NFP tax & regulatory reform

• Undertake reviews arising from Treasury scoping study for a national NFP regulator

• Support the Special Tax Forum NFP Sector Reform Council working group

• Further information:– Treasury’s Not-for-profit Reform Newsletter – http://treasury.gov.au/content/not_for_profit.asp

NFP tax & regulatory reform

• Independent statutory body report to Parliament (through Minister) own appropriation

• Headquarters in Melbourne & presence in Canberra• Back office services from ATO including IT support

and payroll • Budget of $53.6m over four years 2011 – 14

(including IT build)

Early Decisions re ACNC

• 1 July 2012 ready to accept applications for charitable registration

under existing common law new registration primarily online transfer of endorsed charities from ATO to ACNC

available on ACNC publicly searchable database information, guidance and general advice available

ACNC Timelines - 2012

ACNC Timelines - 2013

• 1 July 2013 statutory definition of Charity activated and

applied new registrations under new Act reporting requirements for charities activated information portal fully operational »online applications for charitable status»publicly searchable database

• Reporting Framework - financial and governance reporting

• Portal - to provide ‘one stop shop’ gateway for NFPs and searchable database for public

• Education – designing ACNC approach to provision of information, guidance and general advice to sector

• Communication - three phase approach to consultation –

Website and YouTube information briefing, Roundtables on key topics, and Public community consultation around Australia

Taskforce Priorities

• Register Charities (ATO apply tax concessions)• Establish and maintain publicly searchable register of

charities• Establish one-stop-shop which enables charities to:

apply for charity registration apply for ABN access Commonwealth tax concessions access state and territory tax concessions, with potential to access other services

• Work with Commonwealth & States and Territories to implement ‘report-once, use-often’ passport

• Promote public trust and confidence in sector

Regulator Role of ACNC is to -

• Light-touch, risk-based, evidence-based approach• Emphasise mainstreaming; encourage public

watchdogs; adopt dual track approach• Provide information, guidance and education• Use graduated powers, provide opportunity for self-

correction• Regulatory Principles: relevance, proportionality,

consistency, transparency, timeliness• Work within ACNC values of independence, integrity,

respect, fairness and accountability

Regulatory Approach

• Support role of ACNC as national regulator, mindful of diversity of NFP sector

• Red tape reduction is critical• Support tiered financial and governance reporting• Need to work with other regulatory, government and

intelligence agencies• Must not forget needs of small charities, reliant on

volunteers and located in remote areas• Maintain mission and purpose

Issues from the Roundtables

• State/Commonwealth working party on policy and regulatory matters (COAG’s Standing Council on Federal Financial Relations)

• Bilateral discussions: ‘one stop shop’ reporting Charity Passport

• ACNC to adopt existing state and territory practices where appropriate and agreed

Working with States/Territories

• From 1 July 2012 all new charity registration will be through the Australian Charities and Not-for-profits Commission

• Charities currently endorsed by the ATO will be automatically registered with ACNC

• Ongoing eligibility will be reviewed following passage of the new charities legislation in 2013

• Annual reporting to ACNC will be required of all registered charities

• To reduce compliance burden, this information will be provided to other federal government agencies

• Information will be available to the public through the online portal from 1 July 2013

• The broader NFP sector may need to register in the future - but not now.

What does this mean to you?

Your comments, questionsand feedback

http://acnctaskforce.treasury.gov.au

http://www.youtube.com/acnctaskforce

Australian Charities and Not-for-Profits Commission (ACNC)

Community Consultation: Part 2

Susan Pascoe (AM) Interim Commissioner & Head of ACNC Implementation Taskforce

ACNC•What does it mean for you?

Registration Reporting

» All entities» Additional reporting medium and large entities (tiers 2 & 3)» Additional reporting large entities (tier 3)

Information Portal Education and Guidance

•Your questions and feedback

Overview

• From 1 July 2012 all new charity registration will be through the Australian Charities and Not-for-profits Commission

• Charities currently endorsed by the ATO will be automatically registered with ACNC

• Ongoing eligibility will be reviewed following passage of the new charities legislation in 2013

• Annual reporting to ACNC will be required of all registered charities from 2013

• To reduce compliance burden, this information will be delivered to

other federal government agencies State and territory agencies that agree to participate

• Information on each charity will be available to the public through the online portal from 1 July 2013

What does this mean to you?

• Details and contact info• Charitable purpose and activity• Charity type and beneficiaries• Source of funds and where you operate• Officer details• Remuneration and tax concessions sought• Governing documents and declaration

Registration

NFP applicant

• Reporting based on three tiers Small - revenue up to $250,000 & not a DGR Medium - revenue of up to $1 million if a DGR; or

between $250,000 & $1 million if not a DGR Large registered entity - revenue greater than

$1 million • Update registration information online, e.g.

Changes to contact information Changes to officers Changes to governing documents (very important)

• Provide required reports

ACNC Reporting Framework

Reporting – all entitiesbalance sheet & income

Reporting – all entitiesactivities & beneficiaries

Additional reporting – tier 2 & 3balance sheet items

Additional reporting – tier 2 & 3income statement items

Additional reporting – tier 2 & 3activities statement items

Additional reporting – tier 3

ACNC Portal – UK example

ACNC Portal – UK search

ACNC Portal – UK charity overview

ACNC Portal – UK charity trustees

ACNC Portal – UK charity guidance

• Accountability framework for Australian charities• Benefits of registration as a charity for taxation

purposes• How to register as a Charity• Obligations of registered charities• Plain English guidance• Valuable links

Education and Guidance

Thank you

Further comments, questionsand feedback

http://acnctaskforce.treasury.gov.auhttp://www.youtube.com/acnctaskforce

http://acnctaskforce.treasury.gov.au

http://www.youtube.com/acnctaskforce