The regulatory approach of the new charities regulator starts with a presumption of honesty, will only invoke action in the case of deliberate misconduct and progressively strengthen that action until the issue is resolved, according to guidelines released yesterday.

The Australian Charities and Not-for-profits Commission’s (ACNC) five-tiered regulatory approach begins with education and support, then follows in order with assisted compliance, proactive compliance, graduated and proportionate sanctions, and finishes with suspension and deregistration. 

ACNC Commissioner Susan Pascoe said the majority of charities acted honestly but when wilful wrongdoing occurred the commission would use its regulatory powers.

“The ACNC begins from a presumption that charities act honestly and prudently.  However, we will take decisive action when a charity acts dishonestly and puts public trust and confidence at risk,” Ms Pascoe said.

The proportionate approach means the regulator will take the minimum action required to address the issue, Ms Pascoe said.

“If a lesser option does not resolve the issue, we will take progressively stronger action until the issue is resolved.

“In most cases we will give the people involved a chance to explain why the issue occurred. We will consider their explanation seriously before we decide if we need to use our formal powers,” Ms Pascoe said.

The ACNC consulted with stakeholders and the public with and the majority of respondents to the consultation agreed with the ACNC’s draft regulatory approach, said Sue Woodward, ACNC Director, Policy & Education.

“Our approach is fair but firm and it will play an important role in helping to maintain public confidence in registered charities,” Ms Woodward said.

The consultation involved over 250 people through an online survey, written submissions and a dedicated phone-in day, plus feedback from attendees at the national community presentations.

Between 80 and 90 per cent of respondents agreed with the statements in the ACNC’s regulatory approach.

The regulatory approach is strongly complemented by education and includes information on understanding and meeting obligations plus examples of fraudulent situations and how to avoid them.

Compliance actions the ACNC can use when charities don’t meet their obligations include informal assistance and advice, letters, warnings, directing a charity to do something, suspending or removing a member of a charity’s governing body and revocation of charity registration.

View the approach and consultation results on the ACNC website of by clicking here: ACNC regulatory approach

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