By Rob Starr, Content Manager, Big4.com

The new charities and Not for Profit (NFP) national regulator – The Australian Charities and Not for Profit Commission (ACNC) has been set up. The ACNC is expected to commence operations in December 2012 and charities will be required to be registered with the regulator to access Commonwealth tax concessions.

Charities should consider these practical implications of the proposed principles of reform including:

  What are the relevant performance indicators and are they consistent with stakeholder needs?

  Is the appropriate level of disclosure being made to key stakeholders including donors?

  Can the organisation efficiently and accurately collect and analyse data which donors require to make informed decisions?

  Does the organisation have the required IT capabilities and skilled personnel to ensure transparent reporting is achieved?

The ACNC plans to introduce a central database of financial and non-financial information for every charity, and in time every NFP entity.  This increased transparency will enable stakeholders (government, donors, partners) to more easily make performance comparisons across the sector, which is likely to impact stakeholder decision making.

The principles of the proposed reform are likely to increase demand for accountability and performance reporting. Donors are likely to be more willing to donate to those entities that are operating most efficiently and are able to clearly demonstrate the value of the outcomes they are delivering.