Banks and other financial providers are being urged to change the way they interact with charities.
The Australian Charities and Not-for-profits Commission (ACNC) and the Australian Securities and Investments Commission (ASIC) are calling for change following over 1,000 complaints regarding the way banks and other financial services providers have tried to verify the information charities provide.
Changes to the reporting system in December 2012 caused the issues, ACNC Commissioner Susan Pascoe said.
“Prior to the establishment of the ACNC, charitable companies limited by guarantee were required to lodge reports with ASIC or notify them of common changes,” Pascoe said. “However, this has not been the case for over three years now.
“Since the establishment of the ACNC in December 2012, charitable companies, which account for around 10 per cent of all registered charities, have been required to report to the ACNC instead.”
Despite messages directing the business community to the ACNC Charity Register, ASIC Commissioner Greg Tanzer said banks continue to check the ASIC register.
Pascoe said that although it may sound like a minor issue, “it has put many charities under significant financial pressure”.
Charities have reported problems such as being denied loans, missing out on grants and loss of AAA credit because of the issue.
“We hope that once the message filters down within these organisations it will decrease the impost that charities are currently facing,” Pascoe said.
ACNC and ASIC are writing to dozens of financial sector representatives and sending a factsheet that explains why organisation work processes need to change.