Importance of Understanding ACNC Governance Standards for Not-for-Profits

[Brisbane, QLD, 9 September 2024] – Navigating governance standards is a critical yet often complex task for Not-for-Profit (NFP) organisations. To help NFPs better understand and comply with these essential requirements, Giuntabell has released a comprehensive guide on the Australian Charities and Not-for-profits Commission (ACNC) governance standards. This latest blog aims to demystify these standards and provide actionable insights to ensure NFPs maintain compliance and uphold public trust.

Understanding ACNC Governance Standards

The ACNC governance standards are a set of minimum requirements that all registered charities must meet to remain compliant with ACNC regulations. These standards are designed to foster transparency, accountability, and responsible management within the NFP sector, ultimately maintaining public confidence in charitable organisations.

The Five ACNC Governance Standards:

1. Standard 1: Purposes and Not-for-Profit Nature
   Charities must operate on a not-for-profit basis and work towards their stated charitable purposes. Organisations must maintain clear, documented purposes that align with charitable causes and ensure all income and assets are used solely for these purposes.

2. Standard 2: Accountability to Members
   Charities must be accountable to their members by providing opportunities for feedback and participation in key decisions. This includes regular communication through meetings, reports, and newsletters, and allowing members to vote on significant changes.

3. Standard 3: Compliance with Australian Laws
   Charities are required to comply with all relevant Australian laws, including tax and employment regulations. This standard emphasises the importance of internal controls, staying updated on legal obligations, and training staff and volunteers accordingly.

4. Standard 4: Suitability of Responsible Persons
   Board members and other responsible persons must be suitable for their roles, free from disqualifications, and conduct themselves in a way that does not harm public trust in the charity. This includes conducting background checks and managing conflicts of interest.

5. Standard 5: Duties of Responsible Persons
   Responsible persons must act with care, diligence, and in the best interests of the charity. They are required to manage financial affairs responsibly, avoid conflicts of interest, and regularly review financial statements to mitigate risks.