Dear NFP colleagues,

We are delighted to report that the Australian Parliament passed legislation to establish the Australian Charities and Not-for-Profits Commission (ACNC) on 1 November. We have been strong supporters of establishing a national regulator for the not-for-profit sector, and we're so pleased that the ACNC will be up and running in 2012.

The opening of the ACNC's doors is the first step towards simplifying the not-for profit legal landscape. We commend the ACNC Taskforce lead by Susan Pascoe AM on their efforts to date, and look forward to working with the ACNC to help equip charities to deal with the new regulatory framework.

For Victorian incorporated associations, this month heralds significant changes with the commencement of the Associations Incorporation Reform Act scheduled for 26 November. Many of you have been watching this space for some time now, and we've been working hard to make sure we have new resources ready to launch as soon as the new Act starts. New regulations and model rules will be finalised and released in the coming weeks, and we will keep you informed.

We look forward to continuing to work with you during this time of change to assist you to understand the new regulatory landscape.

Juanita Pope

The Associations Incorporation Reform Act 2012 and the ACNC - Regulatory Update 

2012 has been a year of extensive change in the regulatory environment for not-for-profit organisations. Our final seminar for 2012 will provide an overview of Federal and State changes in the law. We will outline reforms to the Victorian Associations Incorporation legislation, and detail the particular issues your group will need to consider. These changes come into effect on 26 November 2012.  In the Federal sphere, we will outline the scope and operations of the Australian Charities and Not-for-Profits Commission, which is expected to open its doors in December 2012. 

Ensure that you're on top of these important changes - and hurry, places are filling fast!

• Dates: Wednesday 21 November 2024 (session full); Thursday 22 November 2012; and Wednesday 28 November 2012. PilchConnect is presenting the same seminar on successive days. The seminars are not a series.
• Time: 9:30am - 12:30pm (registrations open at 9:15am) 
• Venue: The Lionel Murphy Centre, 360 Queen Street Melbourne

To register for the seminar, follow the link below:

Fundraising foundations and charitable trusts

If you want to start a fundraising entity or grant making foundation to support a particular cause or charity, you may be considering setting up a charitable trust or Public or Private Ancillary Fund.

While setting up your own trust or foundation may be appealing, the process is very complex. PilchConnect has a new factsheet on fundraising foundations and charitable trusts that includes information on:

• what is a charitable trust or grant making foundation?
• how do you set up a foundation? 
• are there simpler alternatives to setting up a foundation? 
• where can you find an existing foundation to contribute to?

The factsheet is available below

Update for Victorian incorporated associations

The public consultation on draft regulations and model rules under the Associations Incorporation Reform Act 2012 (the 'new Act') has now concluded. The Government is currently considering submissions and will release a final version of the regulations (including the new model rules) in time for the commencement of the new Act on 26 November 2012.

If your association operates under the current model rules, it can keep using those model rules for 12 months after the new Act commences. During that 12 months, your association can either:

• formally adopt the new model rules  
• draft its own rules and have these rules approved by CAV, or 
• do nothing and move automatically to the new model rules at the end of the 12 month transition period.

You should be mindful that during the transition period, although you can operate under the old model rules, some of the new model rules will be automatically included into your association's old model rules. This is because all organisations' rules must address certain new scheduled matters. For example, CAV has advised that the old model rules do not outline the rights and liabilities of members as required by the new Act. Therefore the new model rule that deals with this scheduled item will be automatically included in your organisations rules. Once the new model rules are finalised and published, we will provide further information on our website about which rules may apply to you. 

If your association operates under its own rules (previously approved by the CAV), it can continue to use these when the Act commences, until it either:

• adopts the new model rules, or 
• changes its rules and has those changes approved by CAV.

Again, where scheduled matters are not dealt with by your rules, the new model rule that deals with the scheduled item will be automatically included in your rules from 26 November 2012.

We will release our new and updated resources for Victorian incorporated associations to coincide with the release of the final version of the new model rules.

PilchConnect submission to the Associations Incorporation Reform Regulations - Regulatory Impact Statement 

In early October, Consumer Affairs Victoria (CAV) released the draft Associations Incorporation Reform Regulations (draft Regulations) with a Regulatory Impact Statement (RIS) for public consultation. The draft Regulations included draft model rules for incorporated associations designed to meet the requirements of the new Act.

PilchConnect made a comprehensive submission (available below) outlining a number of key concerns with the draft Regulations and draft new model rules. In particular, PilchConnect submitted that:

• the new fee structure set out in the draft Regulations significantly increases fees to be paid by incorporated associations to CAV, and the rationale for this increase is not justified
• the draft Regulations do not adequately set out the circumstances in which a fine can be imposed on members of an association by the committee of that association, and do not provide a procedure for the imposition of fines on members, and
• the draft model rules are problematic in several respects, including:
  • the imposition of duties on committee members in addition to the duties provided for in the new Act and the common law
  • the right of members to gain access to the broad category of 'relevant documents' of an association, and
  • the use of legal language rather than plain English drafting.

PilchConnect's submission also provided a table of comments on each proposed model rule and alternative drafting options.

PilchConnect's submission, and a link to the draft Regulations and RIS from CAV are available below:

ACNC Legislation Passed

Legislation to establish the Australian Charities and Not-for-Profits Commission (the ACNC) was passed by Federal Parliament on 1 November 2012. Although the official start date for the ACNC will be released over the coming weeks, we anticipate it will open its doors in early December.

The ACNC legislation includes amendments proposed by the Senate, which we consider significantly enhance the Act. The amendments reflect a number of the recommendations made in the PilchConnect submission, available here.

From December 2012 the ACNC will:

• provide a central point for the registration of Australian charities
• determine charitable status and public benevolent institution status of organisations
• implement a 'report-once-use-often' reporting framework, including the introduction of a ‘Charity Passport'
• build and maintain a publicly searchable Information Portal, and 
• provide education and guidance to the sector and the general public to promote legal compliance and transparency.

The new ACNC website will be launched before the ACNC opens its doors in early December. In the meantime, further information on the ACNC and the role it will play is available on the ACNC Taskforce website here. We will also continue to update our website with resources on how the new ACNC will impact your organisation.

Melbourne City Council Court action threatens historic charitable sentencing practice 

PILCH, through the work of PilchConnect, was recently granted leave to make submissions and provide expert advice to the Supreme Court as amicus curiae in an appeal bought by the Melbourne City Council (the Council). An 'amicus curiae' means 'friend of the court'.

The Council was appealing an August 2011 decision requiring an individual who pleaded guilty to breaches of the Food Act to make a donation to St Vincent De Paul's food van service.

PilchConnect became involved in the case because of its potential to significantly affect the charitable sector. If the appeal is successful, it may end the historic sentencing practice of courts requiring offenders to make payments to charities, or into the Court fund for distribution to charities (known as the 'poor box'), as a condition when adjourning proceedings. Anecdotally, millions of dollars are distributed to charities through this process each year.

PilchConnect supports this practice, which works for both charities and for the rehabilitation of offenders, who are given the opportunity to make a meaningful contribution back to the community.

The Council argued in its appeal that the payment of money to charities under a condition imposed by a court should be considered a 'fine' and in this case be paid to the Council, not to a charity. PilchConnect submitted that there is a meaningful distinction between a fine and a payment made as a condition of an adjourned undertaking.

Justice Dixon has reserved judgment and we await the outcome with much anticipation.

PilchConnect would like to thank the great work of law firm Herbert Smith Freehills and barristers Andrew Woods and Samuel Bird for their pro bono assistance with this case.

Media coverage on the matter is available, below:

ABC AM Program: Council seeks end to court ordered charity

The Age: City challenges charity penalties 

The Herald Sun: Melbourne City Council out to grab charity cash

Pro Bono News: Court Decision on Charity Payments Reserved

(PilchConnect Director, Juanita Pope, addresses ABC News outside the Supreme Court)

PilchConnect News

PilchConnect has had a busy October! We've travelled the state to deliver training, prepared submissions, appeared on behalf of the charitable sector in the Supreme Court, given media interviews, and we've been lucky enough to attend and present at some great conferences.

Office for the Community Sector Not-for-profit Summit

This month, the Office for the Community Sector's annual Not-for-profit Summit ‘Change - Challenge & Choice' was held at Simonds Stadium in Geelong on 17 October. Some 350 delegates gathered to hear from a great range of speakers and participate in a range of practical capacity- building workshops.

Ben and Kate hit the road to attend the Summit and man the PilchConnect exhibit, and were delighted to meet a range of organisations and hear about the great work they're doing. Importantly, one lucky new e-bulletin subscriber correctly guessed the amount of jellybeans in PilchConnect's jar to win a free ticket to a PilchConnect seminar of their choice - congratulations!

                                               (Ben and the PilchConnect Jellybean Jar) 

Thomson Reuters Not-for-Profit law and regulation conference

The Thomson Reuters Not-for-Profit law and regulation conference was held in Sydney on 17-19 October. The topical conference was addressed by Assistant Treasurer, David Bradbury, who provided a valuable insight in to the Federal reform agenda for not-for-profit organisations. A copy of the speech presented by the Minister is available here.

PilchConnect lawyers, Juanita and Phoebe, presented a session helping to equip not-for-profit organisations to effectively deal with the significant changes in the NFP regulatory landscape. The session drew on case studies to highlight the importance of providing accessible, accurate, and plain English information to organisations during a time of great change.

Our Community Board Builder Conference

The Our Community Board Builder Conference is being held on 30 November. Juanita will be joining an eminent group of keynote speakers, including Senator Penny Wong and Susan Pascoe, Commissioner of the Australian Charities and Not-for-profit Commission.

For information on the conference, including registration details, visit the Our Community website below:

Requirement to indemnify committee members

New laws for incorporated associations introduce a requirement that associations ‘indemnify' their office holders (including committee members). Some organisations may already have an ‘indemnity clause' in their Rules. If your organisation doesn't, you will now be required under the new Act to provide this indemnity to your office holders. 

What is this 'indemnity', you ask? Under the new Act, the association must ‘indemnify’ (pay back / reimburse) office holders for costs that they incur on behalf of the organisation (so long as they acted in good faith).

• TIP! The indemnity of office holders is not the same as indemnity insurance. 
• TIP! The new Act does not introduce a legal requirement for organisations to take out insurance.
• TIP! While this new law does not require your organisation to take out insurance, it is certainly worth considering insurance to cover the potential costs of the indemnity, as a part of your overall risk management strategy.

The costs an office holder might incur will usually be small - like the cost of lodging a change of rules with CAV, or buying stationery. However, in very rare situations, your organisation may be required to cover large costs incurred by an office holder – for example, if someone takes legal action taken against a committee member.  (Remember, your association would only need to pay back their costs if they had acted in good faith.)

The money paid to an office holder under the ‘indemnity’ comes out of the organisation’s money.  If an office holder has incurred a very large cost and the organisation can’t afford to pay it, this can create serious financial difficulties for the organisation. It is for this reason that many organisations choose to take out insurance – to cover unexpected costs of indemnifying its office holders.

For more information on insurance, and risk management more generally, visit our website below. 

Advocacy - Health Alliances Symposium

PILCH, in partnership with LaTrobe University and Loddon Campaspe Community Legal Centre is running events next week as part of the Advocacy Health Alliance Symposium. The events bring together the health and legal sectors to discuss Advocacy Health Alliances, featuring guest speakers from the National Centre for Medical Legal Partnerships in the United States.

While Advocacy-Health Alliances or Medical-Legal Partnerships are in their infancy in Australia, there is a relatively long-standing medical-legal partnership movement in the United States. These partnerships have not only broken down the barriers to accessible legal services for people experiencing health issues - they have demonstrated the socio-legal impacts on health and the associated health benefits of effective legal advocacy for patients.

Featuring internationally renowned speakers, the symposium will:

• catalyse thinking and practice concerning Advocacy-Health Alliances
• illustrate current Australian examples of Advocacy-Health Alliances
• form and strengthen networks, and
• identify steps for advancing Advocacy-Health Alliances in Australia.

There are places available for the events on Thursday 15th and Friday 16th November. For further information, or to register to attend these events, please visit the website below.

PilchConnect is a specialist legal service which provides legal help to not-for-profit community organisations.

The service provides free and low cost legal information, training, advice and legal referrals for Victorian not-for-profit community organisations. We also advocate for law reform on the wide range of legal issues that affect the not-for-profit sector.

To find out more about our legal services, visit our website below:

 PilchConnect - Legal help for community groups. 

View our staff profiles here. 

To unsubscribe, please click here. To subscribe, please click here. If you would like to contribute to, or provide feedback about this e-bulletin, please email  connect@pilch.org.au.