Charities must meet governance standards

As it is end of the financial year for many charities, a reminder of the five governance standards that charities must meet to be registered and remain registered with the ACNC is appropriate.  The standards do not apply to basic religious charities.

The governance standards are a set of core, minimum standards that deal with how charities are run, including their processes, activities and relationships.

They require charities to remain charitable, operate lawfully, and be run in an accountable and responsible way.  They help charities to maintain trust with the public and continue to do their charitable work.  Because the governance standards are a set of high-level principles, not precise rules, each charity must decide how it will comply with them.

Standard Principle
Standard 1: Purposes and not-for-profit nature: Charities must be not-for-profit and work towards their charitable purpose.  They must be able to demonstrate this and provide information about their purposes to the public.
Standard 2: Accountability to members Charities that have members must take reasonable steps to be accountable to their members and provide them with adequate opportunities to raise concerns about how the charity is governed.
Standard 3: Compliance with Australian laws: Charities must not commit a serious offence (such as fraud) under any Australian law or breach a law that may result in a penalty of 60 penalty units (currently $10,200) or more.
Standard 4: Suitability of responsible persons Charities must take reasonable steps to:

  • Be satisfied that its responsible persons (such as board or committee members or trustees) are not disqualified from managing a corporation under the Corporations Act 2001 (Cth) or disqualified from being a responsible person of a registered charity by the ACNC commissioner, and
  • Remove any responsible person who does not meet these requirements.
Standard 5: Duties of responsible persons Charities must take reasonable steps to make sure that responsible persons are subject to, understand and carry out the duties set out in this standard.

Charities must have evidence of meeting the standards that they can provide if requested.
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