A Message From The Director

Dear not-for-profit colleagues,

PilchConnect turned 3 years old on 19 November! As well as pulling out some old photos and having a small office party, it made me reflect. Since our ‘birth' we have helped with thousands of enquiries, provided legal advice (by phone and pro bono referrals) to 745+ NFPs, delivered training to 2,200+ people across Victoria, sent 34 e-bulletins, added numerous fact sheets and guides to our web portal, made 22 law reform submissions...we even have 700 Twitter followers!

But so what? Why do we bother?

We are a small, hardworking and passionate team. We try to make a difference by giving practical and up-to-date legal information and advice about common issues you face in running your community group. You make the difference - we just try to make it easier for you. Thank you for your support. The issues we glean from all those enquiries inform our law reform work which means we can advocate more persuasively for less red tape and smarter regulation. It's your feedback that helps us work out where the training and resource gaps are.

Please keep spreading the word about the service we offer! Next year we have lots of great (and some new) things planned. Our e-bulletins and tweets will keep you updated.  The team @PilchConnect (including our great volunteer law students) wish you a safe and joyful summer break.

Warm regards,

Sue Woodward
Director, PilchConnect

CBD Seminar Series

It's been another very successful year for PilchConnect's NFP training program. In 2011 we held 10 legal information seminars targeted at small to medium not-for-profits, generously hosted by PILCH member law firms. The seminars were presented by lawyers from PILCH member firms as well as members of the PilchConnect legal team. Topics in 2011 included Running Fundraising Events, Legal Issues in Managing Volunteers (full day training), and Handling Conflict and Misconduct in the NFP workplace.

PilchConnect's legal seminar series kicks off again in February 2012 with our popular introduction to legal issues for NFP community groups in Victoria - Navigating the Maze.

This seminar is designed to help you navigate the ‘maze' of legal concepts, processes and requirements for not-for-profits - especially useful if you are just getting started! We're currently finalising the details of this seminar, which will be made available on our website shortly and advertised in the January e-bulletin.

If you have comments on PilchConnect's training, or there is a particular topic you would like us to cover in future training please don't hesitate to contact us.

Are you planning a community training program for 2012? Arranging a capacity-building conference for volunteer-based organisations? Getting local not-for-profits together to learn about legal issues?

If so, consider PilchConnect as your legal training provider. Our highly skilled community lawyers are available to assist with practical, plain-language training sessions to help NFPs understand their legal and compliance obligations.

If you would like PilchConnect to deliver training for your local council, network, peak body or community organisation in 2012 - please contact us as soon as possible. Our 2012 training calendar is filling up fast!

For more information about legal training on request visit our website, below:

The breakfast event was generously hosted by Freehills and attended by lawyers from PILCH member firms and select representatives from the not-for-profit sector. Sue Woodward, Director of PilchConnect, facilitated the conversation.

The conversation is available as a podcast in three parts. To download the conversation visit our website, below:

A Definition of Charity - Consultation Paper

PilchConnect recently made a submission to Treasury on ‘A Definition of Charity - Consultation Paper'.

Our submission endorses the detailed submissions by the Melbourne University Not-for-profit Project. We emphasised several points we think are of particular importance to small and medium NFPs. For example, our submission notes that one of the most common requests from our clients is assistance to understand (and access) charitable tax concessions. Clearly the definition of charity is pivotal to most of these concessions. Therefore we are concerned to ensure that any restatement of charitable purposes promotes clarity and accessibility for the NFP sector.

In our view, it should be possible for a non-lawyer to ascertain from reading the legislation if the NFP they are involved in is clearly eligible for charity status (ie, to work out if the group is clearly 'in', or even clearly 'out', of the running for endorsement as a charity). While specialist charity law advice will always be necessary for those at the margins of the definitions, the need to pay for legal assistance for those which are clearly eligible diverts scarce financial resources away from NFP service delivery. For many small groups, the lack of clarity also means they do not obtain the concessions they are eligible for.

Further information, including the PilchConnect submission, can be found on our website, below:

  PilchConnect Submission on the definition of charity

Australian Charities and Not-for-profits Commission (ACNC) Bill - Treasury Exposure Draft

The Federal Government has released for public consultation an exposure draft of legislation to establish the ACNC. From 1 July 2012, the ACNC will determine charitable status, provide education and support to the sector and administer a regulatory and reporting framework.

The ACNC exposure draft and explanatory materials seek to establish the ACNC, set out the objects and functions of the ACNC and provide a new national regulatory framework for the NFP sector.

Submissions to the exposure draft are due on 20 January 2025. Further information can be found on the Treasury website, below.

 ACNC Bill - Treasury Exposure Draft

Review of NFP Governance Arrangements - Treasury Consultation Paper

On 8 December 2011, the then Assistant Treasurer, the Hon. Bill Shorten released a Consultation Paper on the current governance arrangements for the NFP sector.

The Consultation Paper seeks views from the sector and other stakeholders about which arrangements work best and what should be the core governance requirements for NFPs. The outcome of this review will feed into the legislation establishing the ACNC.

Submissions to the Consultation Paper are due on 20 January 2025. Further information can be found on the Treasury website, below.

 Review of NFP Governance Arrangements

Reporting Framework for Charities - ACNC Implementation Taskforce Discussion Paper

The ACNC Implementation Taskforce has released a Discussion Paper regarding the functions and operations of the ACNC. The Discussion Paper canvases the design and implementation of the new reporting framework for charities that will be administered by the ACNC and is a central platform for the Government's vision of ‘report once use often' reporting for the NFP sector. The paper also seeks comments on the ACNC's public information portal and educative role.

Submissions to the Discussion Paper are due on 27 February 2025. Further information can be found on the ACNC Implementation Taskforce website, below:

 ACNC Implementation Taskforce Discussion Paper

In addition to the release of the Discussion Paper, the Taskforce will be conducting a series of face to face consultations from 30 January 2012.

The Taskforce will be visiting Melbourne on 7 February 2012, and representatives from the community sector are encouraged to register their attendance.

The full timetable for the ACNC Taskforce Community Consultations, together with registration details, can be found on the ACNC website, below:

Occupational Health & Safety - National Harmonisation

In 2008, the Commonwealth Government, together with all States and Territories, committed to nationalise the work health and safety laws by 2012.

The Work Health and Safety Bill (the Model Bill) was expected to be introduced by the Victorian Government by 1 January 2012. However, whilst the Victorian Government has confirmed its support for national harmonisation, PilchConnect understands that the legislation will not be introduced in time for a 1 January 2025 commencement, and is likely to be deferred.

PilchConnect will continue to notify readers of developments in the Victorian Government's reform agenda as further details become available. For quicker updates, follow us on Twitter or Facebook.

The Centro decision: What does it mean for Not-for-Profit board members?

You may or may not have heard the publicity surrounding the recent Centro case which found a number of directors had breached their duty to act with care and diligence. While this case centered on the financial disclosure for a ‘listed company', there are still implications and lessons that can be learnt for those involved in the governance of a NFP organisation.

In June this year, Justice Middleton of the Federal Court considered an action by the Australian Securities and Investment Commission (ASIC) against the directors of Centro Properties Limited, Centro Property Trust and Centro Retail (Centro), in relation to breaches of the Corporations Act 2001 (Cth). ASIC argued, and the Court agreed, that the Centro directors had failed to notice "significant errors" in the consolidated financial statements of this group.

The Court found that directors had relied on their auditor's work rather than critically reviewing the financial statements and accounts and forming an independent judgment for themselves. The Court noted that while delegation is acceptable, it does not absolve a director from the responsibility to "take a diligent and intelligent interest in the information available". The Court believed that had the directors asked the appropriate questions and applied an "enquiring mind", the errors would have been detected.

Whether your organisation is a company limited by guarantee and subject to the Corporations Act, or an incorporated association and subject to the Associations Incorporations Act, your board or committee, and those involved in the governance of your organisation will owe a duty of care and diligence to your organisation, and the findings in this case are a good source of guidance for complying with this duty.

Our three top tips for directors (and those involved in an organisation's governance) from the Centro decision are: 

1. Delegation and unquestioned reliance on others is not acceptable where the responsibility is specifically placed on a director, committee or board member, particularly in relation to the finances of an organisation.
2. Committee or board members are not expected to know everything, but if they are delegating and relying on others to prepare accounts or reports, they need to properly review the findings and question any issues that arise.
3. Committee or board members need to be aware of the organisation's financial position and ensure that they have an understanding of the basic financial concepts relevant to the organisation.

Further information on the duties of committee or board members can be found in the PilchConnect Guide to legal duties of not-for-profit Committee members, available on our website, below:

The internet, social media and your organisation

The internet, and especially social media, are increasingly becoming vital communication and marketing tools for NFP organisations. They can be a great way for your organisation to promote its cause and services, and to communicate with your community cheaply and quickly.

However, there are risks to reputation and legal risks involved in social media use, especially because of the speed with which information travels on the internet, its global reach, and the lack of control that your organisation has once something goes online.

We have a new page on the PilchConnect webportal addressing these issues and a new factsheet on the legal issues to consider when using Facebook. For further information, visit our website at the link below:

Have you missed an earlier edition of PilchConnect's e-bulletin and want to get up-to-date? All of our previous newsletters are available on the PilchConnect website at the link below, including this month's edition!