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The ACNC has issued some guidance for charities who provide gifts or honorariums to individuals. The ACNC is concerned that charities may not be complying with the ACNC governance standards in relation to these gifts.

Where charities provide small one-off gifts to show their appreciation to individuals who are important to the organisation, the charity is unlikely to be contravening the governance standards. However, where the gifts are large, regular or lack transparency, the following issues might arise:

  • A private benefit may be provided - charities are not permitted to provide private benefits to members
  • The charity may not be acting in good faith and in the charity’s best interests and may not be using its funds to further its charitable purposes
  • The charity's financial affairs may be being managed irresponsibly
  • A lack of transparency may indicate the charity is not being accountable to its members
  • If the gift is provided to a charity’s board member, committee member or trustee, there will be a conflict of interest which should be disclosed and managed appropriately

Providing gifts or honorariums to Responsible Persons may require disclosure in the charity’s financial statements. It is also possible that the payment is not really a gift or honorarium, but is a payment to an employee or contractor. In these situations, the charity may be in breach of its employment and taxation law obligations.

Charities should consider what processes and procedures they have in place for approving gifts and honorariums and for ensuring they are complying with their legal obligations and the ACNC governance standards. If you would like to discuss your obligations, please contact us.

Jeff Tulk

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