Changes to Not for Profit Regulations

Damien and I recently attended a presentation hosted by the Australian Institute of Company Directors (AICD) on the future regulation and disclosure requirements for Charities and Not for Profit Organisations. The guest speaker, Senator Annette Hurley MP, gave an overview of a recent inquiry on this topic, including the key recommendations arising out of the inquiry.

Listening to the Senator speak and the subsequent remarks and questions from the attendees it appeared to me that:

• The larger Charities and Not for Profit organisations, with some reservations, were generally supportive of the inquiry, the Federal Governments focus on the “Third Sector” and the key recommendations;
• The smaller organisations, particularly those with limited resources and funding, were concerned about the potential additional resources and cost to comply with the recommendations;
• The Federal Labour Government appears to be committed to implementing the recommendations and is keen to move on some of the recommendations that it believes can be implemented quickly, i.e. in 2009, and with limited adverse impact on the sector;
• There is going to be increased expectation for Not for Profit organisations and Charities to disclose key financial data, particularly relating to fundraising, in a new standardised format;
• There is likely to be one national regulator for the sector and a desire to have standardised constitutions and laws relating to the governance of all organisations in the sector, irrespective of size and purpose;
• The more contentious recommendations, particularly those relating to increased disclosure, transparency and accountability are likely to be deferred until consensus can be achieved after consultation with organisations and other key parties involved in the sector.

In my view it is important for all Charities and Not for Profit organisations to at least familarise themselves with the recommendations and understand how they might impact on their organisations current governance and reporting requirements.

A summary of the recommendations is listed in our latest newsletter, which can be found on the Enterprise Care website at www.enterprisecare.com.au.

Mark Rudd, Director