Effective Governance Structures for Charities And Not for Profits

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Effective Governance Structures for Charities and Not For Profits: ACNC Requirements and More

TEN Charities & Not-for-Profits: The First National Technical and Regulatory Conference

Melbourne, 2013

The ACNC

The principal piece of legislation is the Australian Charities and Not-for-Profits Commission Act 2012 (the “Act”).

The Act establishes a new regulator for the sector, the Australian Charities & Not-for-Profits Commission (“ACNC”) to act as the point of first registration of Charities and then the regulator of compliance or otherwise of registered charities.

The reach of the ACNC is to “charities” only at this point in time being entities that qualify under the common law meaning of charity, namely not for profit public benefit bodies whose purpose is:

  • The advancement of education;
  • The advancement of religion;
  • The relief of poverty; or
  • Other purposes beneficial to the community.

The intention is that the reach of the ACNC may eventually extend to all Not for Profits (whether charities or not) including sporting clubs for example.

What Do We Mean By “Governance?”

ACNC: “[G]overnance is the process, activities and relationships that make sure your organisation is effectively and properly run.”1 Yes; however when management is in place, governance does not equal management.

Some helpful distinctions:

  • Governance: Minds | Management: Hands
  • Governance: Strategy | Management: Implementation

Those distinctions only take us so far – there is still too much room for a ‘very blurry line’ between:

  • one hand the domain of the Board / Council / Management Committee;
  • on the other the domain of Management – often the paid staff of the organisation.

When the ACNC talks of governance, it has the Board in primary view but as we will see, senior management is also in view.

In larger organisations senior management will be expected to exercise some of the governance function (to the extent that it has been properly delegated by the Board).

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