Two announcements over the past week indicate some signs of movement in the not-for-profit sector reforms.

Appointment of ACNC Commissioner

On 6 June 2012 the federal government announced Susan Pascoe will be the Inaugural Commissioner of the Australian Charities and Not-for-Profit Commission (ACNC).  Ms Pascoe is currently the Interim Commissioner of the ACNC Taskforce, and has been steering the sometimes rocky path of consultation with the sector in developing the legislation and the future approach of the ACNC.  Ms Pascoe is from Melbourne, and the head office of the ACNC will also be in Melbourne.

Reviewing the ACNC’s Regulatory Approach

The other announcement is that the ACNC Taskforce appears to still be reviewing its regulatory approach.

While the proposed powers of the ACNC were circulated in the draft legislation earlier this year, the Taskforce has commissioned Professor Valerie Braithwaite from the Australian National University to write a paper looking at good regulatory practice. Professor Braithwaite will be investigating regulatory practices that may be adopted by the ACNC, as well as looking at how the ACNC might deal with non-compliant charities.

According to Susan Pascoe, this paper will be used after the legislation has been passed, to assist the ACNC in its approach to consultation with the sector.

Education and Enforcement

The ACNC Taskforce in its consultation sessions and in information on its website, has been at pains to point out that it will be taking a graduated approach to regulation and reporting, based on the size of the organisation and available resources.

Susan Pascoe, in her 31 May 2012 column, pointed to a clear distinction between working with those organisations which need support, and those who “choose not to comply”.  The “early thinking” of the ACNC Taskforce, is that there is a Regulatory Pyramid of Support and Compliance, which starts with education and support, then escalates to compliance activities and sanctions.

The draft legislation, which has not yet been finalised, gives the ACNC the power to impose some fairly serious sanctions, including enforceable undertakings, and suspending or removing trustees and appointing acting trustees. These powers will give confidence to donors that there will be some recourse against charities which, for whatever reason, have not done the right thing.

Time will tell as to the balance of education and enforcement that the ACNC will use once the new laws commence.