Have your say on whether new rules should lift the veil on charity regulator investigations

Treasury’s window for consultation on draft changes to Australian Charities and Not-for-profits Commission (ACNC) regulations closes on Friday, October 2.

The changes would see the ACNC required to provide its reasons for cancelling a charity’s registration on the Charities Register, or to explain why it had taken no action following an investigation. For example, charities found to have contravened or “more likely than not” to have contravened the Act, not complied with governance standards or not complied with external conduct standards would all be publicly named under the new draft regulations.

A source close to the process told the Community Advocate that the change was important to encourage public trust not just in charities but in the regulator. Recent changes that allowed the ACNC to at least confirm it was investigating a registered charity had been a step in the right direction, but more was needed, they said.

“Previously, the ACNC couldn’t even confirm or deny it was undertaking an investigation. But that was changed, so that’s already been implemented,” they said. “The ACNC’s purpose is to promote public trust and confidence in charities, but there’s obviously public trust and confidence in the regulator too, which is important.”

The ACNC’s regulation-enforced silence even extended to communications with the government, the source said. “I imagine the ACNC will be pretty sparing in how it uses it [the new ability to disclose information]. Where it has been a challenge in the past is when the commissioner goes to Canberra for Senate estimates, and gets asked: ‘Did you investigate this charity or that charity?’ And the commissioner has always had to say, ‘I can’t comment.’ Whereas after these regulations, it would be possible for the commissioner to at least say, ‘I’ll take that on notice.’”

The proposed new regulation would see the ACNC able to publish reasons why an investigation had been held and what a charity had agreed to in terms of improved governance or other registration conditions.

“Some charities would go, well, if you investigated us and you didn’t find anything worthy of deregistering us, why would you publicly say the reasons why you investigated us?” the source said. “That might lead to reductions in donations and things like that. But the ACNC will have to consider those factors and the public interest before publishing reasons for why it did an investigation.”

Prolegis Lawyers, a prominent supplier of legal assistance to not-for-profits and charities, said the draft changes were broadly positive but the firm had concerns about the impact of any ACNC disclosures on the all-important reputation and perceived trustworthiness of charities mentioned. It was vital to ensure any push for transparency did not result in unreasonable speculation and comment about a charity, the firm said.

“There is an important balance to be struck,” Prolegis senior counsel Claire Jones told the Community Advocate. “From the beginnings of the Australian Charities and Not-for-profits Commission, the secrecy provisions were designed to promote cooperation between charities and the ACNC. This was to help fulfil the ACNC’s objective of maintaining, protecting and enhancing public trust and confidence in the sector. Normalising public comment about regulatory activity is a positive step, when it is done in a way that minimises unconstructive public criticism of charities.”

While there is general agreement that the proposed changes will address shortcomings in the current legislative framework, there are concerns that the broad powers, as written, to disclose information about investigations do not necessarily have to be tested against the same technical and holistic considerations that apply to other compliance powers.

An alternative view, proposed by the source close to the process, is that charities may need to be “more mindful about how they engage with the ACNC if the charity knows that the ACNC might publish these reasons.”

The threshold for a charity to be deregistered is quite high, and the process has many lesser corrective steps, they said, so the proposed changes “give the ACNC a bit more leverage in terms of getting a charity to return to the course of doing the right thing.”

A spokesperson for the ACNC said the Commission had not adopted a public position on the policy proposal. “As an independent regulator, the ACNC administers the legislative framework governing charities. Decisions about changes to that framework are matters for government, and the ACNC will administer the laws and regulations enacted by Parliament,” they said.

Eight years of discussions

The journey to this point has been a long and winding one.

In 2018, a report prepared for Treasury following a review by Patrick McClure examined the continuing relevance and effectiveness of the ACNC regulatory framework and whether the ACNC Commissioner had the necessary powers and functions to meet the Commission’s objectives.

Strengthening for Purpose: Australian Charities and Not-for-profits Commission Legislation Review 2018 found that the secrecy provisions of the ACNC Act were “overly restrictive and should be amended to allow the Commissioner to disclose information in a wider range of circumstances, including to protect public trust and confidence in the sector”.

“The ACNC's inability to make any comment in respect of whether it is (or is not) undertaking an investigation in respect of a complaint against a registered entity is harmful to the perception of the ACNC as an effective regulator,” the report said. “Further, the Commissioner should be authorised to collect the personal details of responsible persons involved in unlawful activity.”

In 2020, the Morrison government’s Assistant Minister for Charities, Senator Zed Seselja, provided an official response, in which he agreed that strengthening trust and confidence in the charity sector was crucial, and that included sharing information about ACNC investigations when in the public interest.

Three years later, the current Charities Minister, Dr Andrew Leigh, said the Albanese Government was committing an additional $2.9 million over four years from 2023–24 and $600,000 on an ongoing basis to support greater disclosure of regulatory activities.

“These changes enable the ACNC to publish information to increase public understanding of registration and compliance decisions for educational purposes, with the aim of improving transparency and accountability in the charity sector,” Leigh said.

“The Government proposes to introduce legislation to support these reforms.”

In December 2025, the government introduced the new rules currently in place, which allow the Commission to disclose:

• the fact that the ACNC is carrying out an investigation
• information relating to an investigation.

Sine the passing of that legislation, the ACNC has made exactly one disclosure.

More information

If you are interested in being involved in the consultation process, which closes on Friday October 2, click here.