It is an understatement to say that there has been a lot of change in the charity sector of late. Religious institutions, educational institutions and health and welfare providers have been affected by reforms that have been described as unrivalled in the history of the Australian Commonwealth. This article provides a helpful first port of call to outline some of the major changes and to direct you to where you may find further information.

1. For the first time in Australian history we now have a government regulator focused solely on the charity sector, the Australian Charities and Not-for-profits Commission (ACNC). The Commission oversees a register containing information on all charities in Australia that may be accessed by the public on its website.
2. The Government introduced five new governance standards which commenced on 1 July 2013 for most charities. Broadly speaking, the standards require charities:
   1. To be not-for-profit and be able to demonstrate this to the ACNC and to show their purposes to the public;
   2. To take reasonable steps to be accountable to their members and provide their members adequate opportunity to raise concerns about how the charity is governed;
   3. To comply with Australian law;
   4. To ensure their directors, trustees, management committee members (referred to as “responsible entities”) are not disqualified from so acting under law;
   5. To ensure their responsible entities do not breach their duties. For the most part, those duties reflect the current requirements placed on directors and trustees by the law.

The standards introduce the new prospect that an institution may lose its charity status (and its associated tax exemption or deductibility endorsement) if it breaches the standards, including where it fails to prevent its directors from breaching their obligations. If you are a “basic religious charity” (a defined term – see references to further material below) you do not need to comply with the standards.

1. Looking forward, charities are required to submit an Annual Information Statement (AIS) that is made publicly available on the ACNC register. The AIS contains information such as your charitable purposes, your activities, the types of people your charity helped, the number of employees and volunteers your charity engages and, depending on your annual turnover, financial statements from the 2014 year onwards. The first statement must be lodged by 31 December 2013 for those charities who undertake financial reporting against the financial year. If you are a “Basic religious charity”, you will not need to provide financial statements in your reporting to the ACNC.
2. The Government has legislated a definition of charity which is to come into effect on 1 July 2014. Previously, whether you were charitable was determined by statutes and judge-made law dating back to the 1600s. The legislation has attempted (arguably not entirely comprehensively) to maintain the existing legal definition. It also retains the displaceable presumption of public benefit for religious, education and health institutions and for those providing relief of poverty and aged or disability care.
3. Religious institutions which have to date considered that they were not required to be registered with the government as a charity in order to be exempt from taxation or to gain a fringe benefit tax rebate will now need to register with the ACNC by 3 December 2013 to gain that status.

This is a brief and broad overview only. There are many differing types of charities and the reforms affect differing charities in differing ways. Further helpful information can be found at www.acnc.gov.au and The Australian Nonprofit Sector Legal Almanac available at http://eprints.qut.edu.au/61386/.

Mark Fowler is a Director at Neumann and Turnour Lawyers and Professor Myles McGregor-Lowndes is the Director of the Australian Centre for Philanthropy and Nonprofit Studies at the Queensland University of Technology.