The Brief with Hundt Law
New ACNC Guidance for Charities in Corporate Groups and other ‘Complex Structures’
By Richard Hundt
The Australian Charities and Not-for-profits Commission (ACNC) has recently released new guidance addressing governance for charities operating within corporate groups or other ‘complex structures’. While acknowledging legitimate reasons for such arrangements – like geographic spread, regulatory compliance, risk mitigation, and tax eligibility – the ACNC warns of governance challenges and risks of non-compliance.
A ‘complex structure’ refers to organisational setups involving multiple entities (charitable and non-charitable), varied legal types (e.g., companies, trusts, associations), cross-jurisdictional operations, shared resources, and related party transactions
The ACNC emphasises that operating within such structures is not inherently problematic, but requires tailored governance. Among the key recommendations include:
Managing Common Boards: Directors must understand which entity they represent at all times. Charities should promote disclosure, manage conflicts of interest, and consider independent board appointments.
Board Meetings: Each entity should hold separate meetings with distinct agendas and minutes to ensure decisions reflect each charity’s best interests.
Clarifying Roles: Clear delineation of responsibilities is vital for individuals working across entities. Accurate organisational charts are recommended.
Policies and Procedures: Charities should assess whether shared or bespoke policies are appropriate, ensuring they are fit for purpose and consistently followed.
Record-Keeping: Each charity must maintain its own financial and operational records to meet ACNC standards and ensure transparency.
Conflicts of Interest & Related Party Transactions: These must be disclosed and managed through robust policies. Transactions should serve the charity’s purpose and be on arm’s length terms or better.
The ACNC’s guidance signals a heightened regulatory interest and need for diligence. Legal counsel may assist charities in navigating these complexities to ensure compliance whilst maximising their impact.
Richard Hundt is a Principal Lawyer of Hundt Law.
Disclaimer: The information in this article is of a general nature and does not constitute legal advice. You should obtain legal advice before relying on its contents. It is not intended to be exhaustive and may not be appropriate or suitable for you.
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