ACNC Legislation Review proposes major changes for the not-for-profit sector

The Australian Charities and Not-for-profits Commission (ACNC) Legislation Review for 2018 was tabled in Federal Parliament on 22 August 2018 and contains a number of recommendations aimed at reducing red tape for charities and not-for-profits. The review proposes a three-step process to achieve this.  

1. Amend the Australian Consumer Law to explicitly cover fundraising activities.

The Australian Consumer Law (‘ACL’) is the national law which regulates what consumers and businesses can and cannot do ‘in trade or commerce’. For example, most consumers would be protected by this law when making a purchase at their local shop. However, it has long been unclear whether charities and not-for-profits conducting fundraising activities are ‘in trade or commerce.’ Charities can read more about this issue here.

The review proposes that the ACL should be amended so that it is explicitly clear that it applies to the fundraising activities of charities and not-for-profits. If this were to occur, it would be an offence under the ACL for charities and not-for-profits to engage in misleading or deceptive conduct or unconscionable conduct, just as it is for a for-profit business. Following this, the second step could take place.

2. Work with states and territories to reduce or significantly amend the existing fundraising laws.

Many of our readers would be aware of the challenges that face charities or not-for-profits seeking to fundraise across state and territory jurisdictions. We have previously written about these issues here.

Currently, the review criticises the different regimes as “inconsistent, complex and inefficient”. There are seven different fundraising regimes that charities and not-for-profits have to comply with if they conduct fundraising across state and territory jurisdictions and it costs significant time and money to become compliant. While some progress has been made to reduce red-tape in South Australia, Tasmania and the Australian Capital Territory, there is still much progress needed.

3. Develop a mandatory Code of Conduct on fundraising for charities and not-for-profits.

A uniform Code of Conduct would provide charities and not-for-profits and their donors with certainty.

In South Australia, a Code of Practice for Collections has been successfully developed and enforced. It contains information about when and where a charity can make a collection, what identification requirements must be met for collectors, when receipts are to be issued and what information collectors must disclose. The review also expressed the hope that a country-wide Code of Conduct would cover issues not contemplated by the current fundraising legislation, such as crowdfunding, commission-based fundraising, telephone fundraising and third party commercial fundraising.

Charities and not-for-profits should watch this space for updates. Hopefully these recommendations will be adopted shortly so that charities and not-for-profits can get back to doing what they do best – providing others with help and support. A full copy of the Report can be found here.

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