Church that refused to join the National Redress Scheme loses charity registration

On 30 November 2021, the Australian Charities and Not-for-profits Commission (ACNC) revoked the charity registration of Devonport Community Church (DCC).

Due to secrecy provisions in the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (ACNC Act) the ACNC has not disclosed why DCC’s charity status was revoked. However, despite being identified in an application for redress, DCC decided not to join the National Redress Scheme for people who have experienced institutional child sexual abuse – conduct that can now lead to revocation of charity registration.

ACNC Governance Standard 6

The ACNC Governance Standards contain core minimum standards registered charities must comply with in order to become and remain registered with the ACNC. For the first eight years after the ACNC was established only five Governance Standards applied. In February 2021 Governance Standard 6 was introduced to promote participation of affected charities in the National Redress Scheme.

Governance Standard 6 requires a registered charity to take reasonable steps to become a participating non-government institution if the charity is, or is likely to be, identified as being involved in the abuse of a person either:

  • in an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth) (Redress Act), or
  • in information given in response to a request from the National Redress Scheme Operator (Secretary of the Department of Social Services) under section 24 or 25 of the Redress Act.

The stated object of Governance Standard 6 is to enhance public trust and confidence in the not-for-profit sector by ensuring that a registered entity’s governance enables it to be accountable for its past conduct relating to institutional child sexual abuse.

Failure to comply with one or more of the ACNC Governance Standards may result in the use of the Commissioner’s enforcement powers and, in the most serious cases, revocation of charity registration. Revocation of charity registration involves loss of Commonwealth charity tax concessions, including income tax exemption, fringe benefits tax rebates and GST concessions.

DCC’s failure to join the National Redress Scheme

In a press release issued on 23 June 2021 the Federal Minister for the Department of Social Services (Minister) named three institutions who had elected not to participate in the National Redress Scheme. The Minister stated that the named institutions had “failed to meet their moral obligations” in not signing up to the National Redress Scheme and had “chosen to shirk their responsibility to finally do the right thing by survivors.”

DCC, located in Tasmania, was one of the institutions named by the Minister. Speaking to The Advocate in June 2021, Pastor Overton said that a “collective meeting” of church members decided not to join as the National Redress Scheme was “behind closed doors and easily abused”. As at the date of revocation of its charity registration, the Church had still not joined the National Redress Scheme.

As noted above, secrecy provisions (found in Part 7-1 of the ACNC Act) prevent the ACNC from making public the nature of its concerns around a particular organisation’s registration or publishing the results of its investigations. However, the ACNC did take the relatively unusual step of publicising DCC’s revocation, noting in its media release that “Charities are required to meet their obligations to the ACNC and they must act in accordance with the ACNC Governance Standards and External Conduct Standards”. DCC’s most public failure to act in accordance with the ACNC Governance Standards was, of course, the failure to comply with Governance Standard 6.

What does this mean for your charity?

If your organisation has been, or is likely to be named in an application to the National Redress Scheme and fails to take steps to join the scheme, your organisation faces a real risk of revocation of its charity registration.

The ACNC secrecy provisions that prevented disclosure of the reasons for the revocation of DCC’s charity registration are currently under review. Recommendation 17 of Strengthening for Purpose: Australian Charities and Not-for profits Commission Legislation Review 2018 was that the ACNC Commissioner be given a discretion to disclose information about regulatory activities (including investigations) when it is necessary to protect trust and confidence in the sector. A Treasury consultation process in relation to this issue was completed on 22 August 2021.

How Moores can help

Moores can assist you to ensure that your organisation continues to remain compliant with all ACNC Governance Standards.

For more information or guidance regarding any of the above, please do not hesitate to contact us.