Charities minister Andrew Leigh reveals details of transparency push

In a speech to be delivered in Melbourne on Thursday, July 26, Mr Leigh outlined the legislative approach aimed at lifting the veil of secrecy that prevents the Australian Charities and Not-for Profits Commission (ACNC) from disclosing details of investigations into charities.

Speaking at the Annual Conference of the Charity Law Association, Mr Leigh said the ACNC Act would be amended to expand Commissioner Sue Woodward’s ability to disclose information about the regulatory body’s activities in three areas:

• Information about the existence of an ongoing investigation into a charity where disclosure is necessary to prevent public harm
• Finalised compliance investigations that did not result in formal compliance action, where disclosure is in the public interest
• Summary reasons for revocation of a charity’s registration.

The ACNC will also begin to publish de-identified reasons for decisions to accept or refuse applications for registration of charities where these are of educational benefit to the charity sector.

“The ACNC takes potential misconduct in the charity sector very seriously, and investigates where necessary,” Mr Leigh will say.

In 2021–22 the regulator finalised 96 investigations, which resulted in a range of outcomes, including the revocation of 15 charities’ registration for serious and ongoing non-compliance.

“However, secrecy provisions currently prevent the ACNC from disclosing whether it is investigating alleged misconduct by a charity, the outcomes of investigations, and/or the reasons for revoking the registration of a charity.

“This limits the ability of the public and charities to learn from ACNC regulatory activities, and adversely impacts public trust and confidence in the sector and in the ACNC as an effective regulator.”

The government announced extra funding in the May budget of $2.9 million over the next four years and a further $600,000 per year after that to allow the ACNC to deliver the reforms.

Mr Leigh says the funding boost will also help to ensure that disclosures are legally accurate and reputational risks to the sector and the ACNC are managed effectively, while maximising educational benefits to the sector.

The ACNC was able to publicly disclose an investigation into allegations around misconduct by the Hillsong Church in March, which Mr Leigh said was crucial to sustaining public confidence in the body as an effective regulator.

At the time, ACNC Commissioner Sue Woodward acknowledged it was extremely rare for the regulator to comment on matters under investigation, but used her discretion to correct the record, following accusations the ACNC had failed to act.

“Although it was stated in Parliament that the ACNC has not acted, I can confirm that we are investigating concerns raised about Hillsong Church charities. Hillsong has stated publicly that it is fully cooperating with regulatory authorities,” Ms Woodward said at the time.

However, the ACNC was only able to make this disclosure because of Hillsong’s consent and in most cases is unable to communicate its actions – a situation Mr Leigh says undermines trust and confidence.

“The reforms will also allow the ACNC to assure the sector and donors that it is acting on issues of public concern, strengthening compliance and boosting public confidence that charities are doing the right thing,” says Mr Leigh.

Claims relating to charity misconduct have received widespread media coverage over the past few years.

They include recent allegations of tax evasion by the Mormon church and reports Kenyan police have launched an investigation into Australian charity Project Rescue Children over allegations it exploited local children to raise funds from overseas donors.

Mr Leigh says the new regime would allow the ACNC to disclose its final actions where there was benefit to the public and announce new or ongoing investigations where necessary to prevent public harm.

“This would strengthen confidence in the ACNC and help the sector to understand its obligations.”

The proposed changes follow a 2018 review of ACNC legislation which identified the ACNC secrecy provisions as overly restrictive and recommended reforms to enable increased disclosures from the regulator.

Mr Leigh says consultation with the charity sector two years ago also revealed support for increased disclosures given the educational benefits and the potential to lift public trust and confidence in a sector that relies heavily on donors and philanthropists to support its activities.

“To ensure that we strike the right balance between improving transparency and affording charities due process, we will consult broadly on all changes to legislation.”

The Minister stressed the amendments to the ACNC Act would strike a balance between promoting greater transparency and accountability within the sector, managing reputational risks to charities, and ensuring personal and confidential information is handled appropriately.

“By increasing public trust and confidence in charities and the ACNC, this reform will help to ensure donors and philanthropists continue to support the sector,” Mr Leigh will say.

“This will contribute to our objective of doubling philanthropic giving by 2030.”

More information:

Minister steps up moves to remove secrecy muzzle from ACNC