As most charities have been identified as acting honestly, the ACNC’s approach begins with providing information and guidance to help charities understand and meet their obligations.

For the small number of charities that don’t meet the regulatory standards, the ACNC will use their powers under the ACNC Act. ACNC Commissioner Susan Pascoe says this proportionate approach means that the regulator will take the minimum action required to address the issue.

“If a lesser option does not resolve the issue, we will take progressively stronger action until the issue is resolved,” says Pascoe.

Compliance actions the ACNC can use when charities aren’t meeting their obligations include:

• Informal assistance and advice, letters

• Warnings

• Directing a charity to do something

• Suspending or removing a member of a charity’s governing body

• Revocation of charity registration.

“Australian charities make a tremendous contribution to the community. It’s important that as the charity regulator that we set the ground rules so charities and the community understand what constitutes good governance practice and effective financial management,” says Pascoe.

“The ACNC begins from a presumption that charities act honestly and prudently. However, we will take decisive action when a charity acts dishonestly and puts public trust and confidence at risk.”

Through the regulatory approach consultation, the ACNC acquired feedback from more than 250 stakeholders and charities to find out their thoughts on the new approach. Findings revealed that 80 to 90 per cent of respondents agreed with the ACNC’s statements on the approach.