Running an Australian charity or not‑for‑profit is incredibly rewarding - and it comes with clear legal responsibilities. At the heart of these are the ACNC Governance Standards, which set the baseline rules for how registered charities are managed. They exist to promote good management, transparency and public trust.
If you’re starting a not‑for‑profit, joining a board or reviewing your organisation’s compliance, understanding these standards is essential. Non‑compliance can lead to enforcement action or loss of ACNC registration. The good news? When you break the requirements into practical steps, staying compliant is absolutely achievable.
Below, we explain what the Governance Standards are, who they apply to, how each standard works in practice, and which documents and policies help you demonstrate compliance in Australia.
What Are The ACNC Governance Standards?
The ACNC Governance Standards are five minimum standards set by the Australian Charities and Not‑for‑profits Commission (ACNC). They outline how a registered charity should be governed, with a focus on purpose, accountability, lawfulness and the duties of the people who run the charity (often called “responsible persons”).
In plain terms, they make sure your organisation is managed responsibly and in line with its charitable purpose. They apply to every ACNC‑registered charity - regardless of size, whether you have employees or volunteers only, and whether you operate locally or overseas.
Maintaining compliance with the standards is a condition of remaining registered as a charity. If your charity loses registration, you risk losing important benefits (such as access to certain tax concessions).
Basic religious charities may be exempt from some standards (specifically Standards 3, 4 and 5), but most charities must meet the full set. If you’re not ACNC‑registered, you’re not legally bound by these standards, but using them as best‑practice governance guidance is still wise.
The Five Governance Standards Explained
1) Purposes And Not‑For‑Profit Nature
Your charity must be genuinely established for charitable purposes, and all activities must further those purposes. You must also be not‑for‑profit - meaning any surplus is used to pursue your mission (not distributed to members or private individuals).
- Why it matters: It protects donors, beneficiaries and the public by ensuring resources are used for the stated cause.
- How to comply: Make sure your governing document clearly states your purposes and not‑for‑profit clauses. Many charities formalise this by adopting a tailored Company Constitution (or rules, for associations). Keep your activities aligned to those purposes, and notify the ACNC if your purposes change.
2) Accountability To Members
If your charity has members, you must take reasonable steps to be accountable to them and provide them adequate opportunities to raise concerns or participate in key decisions.
- Why it matters: Members help keep the charity on mission through oversight and engagement.
- How to comply: Hold AGMs as required by your rules, circulate annual reports, and follow proper meeting and voting procedures. Maintain an up‑to‑date member register and communicate decisions in a timely, transparent way.
3) Compliance With Australian Laws
Your charity must comply with all applicable Australian laws (Commonwealth, state/territory and local). This goes beyond charity law and includes areas such as fundraising, workplace relations, safety and tax.
- Why it matters: Lawful operations preserve public confidence and protect your registration.
- How to comply: Periodically review activities against relevant laws and licences. If you have employees, ensure you’re meeting Fair Work obligations (the basics start with a compliant Employment Contract and clear policies), and check any state fundraising authorisations needed for appeals or events.
4) Suitability Of Responsible Persons
Your responsible persons (e.g. directors, committee members or trustees) must be suitable for their roles. They must not be disqualified from managing a corporation or be disqualified by the ACNC.
- Why it matters: It reduces the risk of mismanagement and protects your reputation.
- How to comply: Run reasonable background checks before appointment, obtain signed suitability declarations, and keep a process to remove a person who becomes disqualified. Board decisions should be properly recorded, often with a standardised Directors’ Resolution Template.
5) Duties Of Responsible Persons
Responsible persons must act with care and diligence, in good faith and for proper purposes, in the best interests of the charity. They must not misuse their position or information and must disclose and manage conflicts of interest.
- Why it matters: Strong governance at board level protects assets, people and purpose.
- How to comply: Provide governance training, keep accurate minutes, and require regular conflict disclosures. Many charities formalise expectations through a practical Conflict Of Interest Policy tailored to their operations.
Documents And Policies That Support Compliance
The ACNC won’t always ask to see your internal paperwork, but the right documents make compliance easier to follow - and easier to demonstrate if you’re ever reviewed. Most charities benefit from having these in place:
- Constitution or Rules: Your foundational document should set out your charitable purposes, not‑for‑profit clauses, membership processes and decision‑making. If you’re a company limited by guarantee, consider a tailored Company Constitution.
- Board Resolutions & Minutes: Formal records of board decisions show accountability and help evidence compliance with Standards 4 and 5. A consistent Directors’ Resolution Template keeps things tidy.
- Conflict Of Interest Policy: Sets out how conflicts are disclosed, recorded and managed. A clear Conflict Of Interest Policy supports Standard 5.
- Whistleblower Policy: Encourages staff and volunteers to report wrongdoing safely. A practical Whistleblower Policy strengthens your governance culture.
- Privacy Policy: If you collect or use personal information (e.g. donors, clients, volunteers), a compliant Privacy Policy helps you meet the Privacy Act where it applies (more on thresholds below) and supports Standard 3.
- Employment & Volunteer Documents: Use clear Employment Contracts and volunteer agreements, plus policies (e.g. code of conduct, safety, grievance) so people know what’s expected.
- Financial Controls & Risk Management: Written procedures for approvals, expenditure, bank access and record‑keeping. Regular reporting to the board and documented budgets/forecasts are good practice.
These documents should reflect your size and risk profile - a small volunteer‑run charity won’t need the same level of complexity as a large service provider. Review them periodically as your operations evolve.
Registering Or Updating Your Charity With The ACNC
Setting up (or updating) your charity involves both structure and registration steps. Here’s the typical pathway in Australia:
1) Choose Your Legal Structure
Before you register with the ACNC, choose a legal form. Common options include an incorporated association (state/territory‑based), a company limited by guarantee (registered with ASIC), or a trust (with a corporate trustee). If you want the benefits of being a separate legal entity, you must incorporate with the relevant regulator. ACNC charity registration is separate and sits over the top of whatever legal structure you choose.
2) Draft Or Update Your Governing Document
Ensure your rules, constitution or trust deed include clear charitable purposes and not‑for‑profit clauses. Many boards use this stage to align their governing document with the Governance Standards and modernise meeting, voting and membership provisions.
3) Apply To The ACNC
With your structure in place and an ABN, you can apply to the ACNC to register as a charity under one or more charitable subtypes. Registration is what makes the Governance Standards apply to you.
4) Manage ATO Endorsements (Tax And DGR)
ACNC registration is separate from tax status. To access Commonwealth charity tax concessions (and, where applicable, Deductible Gift Recipient (DGR) endorsement), you must be endorsed by the ATO. Not every charity is eligible for DGR - eligibility depends on specific categories and criteria.
5) Keep Your Details Current
After registration, promptly notify the ACNC when your charity’s details change (responsible persons, governing document, address or activities). Keeping your record current is a core part of ongoing compliance.
Other Legal Obligations For Australian Charities
Beyond the Governance Standards, there are several legal areas most charities need to consider to operate lawfully and sustainably in Australia.
Fundraising And State/Territory Licensing
If you raise money from the public, you may need fundraising authority/registration in one or more states or territories. Requirements differ by jurisdiction and can apply to online appeals, events and raffles. Check the rules wherever you fundraise and follow advertising and record‑keeping obligations.
Employment And Workplace Obligations
If you employ staff, you must comply with the Fair Work framework - including minimum pay, leave entitlements, record‑keeping and safe work duties. Use clear Employment Contracts and appropriate policies. Volunteers should also receive written guidance about roles, safety and conduct.
Privacy And Data Protection
Many smaller charities have an annual turnover under $3 million and may not be “APP entities” under the Privacy Act 1988 (Cth). However, the Privacy Act still applies to certain charities regardless of turnover, including those that provide a health service or trade in personal information, or are contracted service providers to government in some contexts.
Even if you fall below the threshold, adopting a clear Privacy Policy and good data practices is strongly recommended. If you do meet the threshold (or otherwise fall within the Act), you must comply with the Australian Privacy Principles (APPs).
Australian Consumer Law (ACL)
Charities that supply goods or services must still comply with the ACL - for example, by avoiding misleading or deceptive conduct, and honouring consumer guarantees. Where you need guidance on your obligations, our consumer law experts can help assess your risk and communications.
Intellectual Property
Protect your brand and materials. Consider registering your name and logo as trade marks to deter copycats and make enforcement easier. You can start with trade mark registration and maintain simple brand guidelines so staff and volunteers use your IP consistently.
Reporting And Financial Management
Most charities must submit an Annual Information Statement to the ACNC and, depending on your size, financial reports that are reviewed or audited. Keep accurate financial records, reconcile accounts regularly and ensure the board reviews financial performance throughout the year - not just at audit time.
Insurance And Risk
Insurance isn’t part of the Governance Standards, but it’s a practical safeguard. Consider public liability, volunteer insurance, directors’ and officers’ insurance, and appropriate cover for any specialised activities. Pair insurance with written risk assessments for events and programs.
Key Takeaways
- The ACNC Governance Standards are five baseline rules for how Australian charities are run - focused on purpose, accountability, legality and board duties.
- All ACNC‑registered charities must comply (with limited exemptions for basic religious charities). Compliance is a condition of ongoing registration.
- Clear governance tools - such as a tailored Company Constitution, board resolutions, a Conflict Of Interest Policy and a Whistleblower Policy - make day‑to‑day compliance easier.
- ACNC registration is separate from tax: the ATO handles charity tax concessions and DGR endorsement, and not every charity qualifies for DGR.
- Beyond the standards, stay on top of fundraising licences, Fair Work obligations, privacy (noting the $3m threshold and exceptions), the ACL, IP protection and financial reporting.
- Good records, regular board training and timely updates to the ACNC will help your charity stay compliant and build public trust.
If you’d like a consultation on the ACNC Governance Standards or help putting the right documents and policies in place for your not‑for‑profit, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.
