Commitment 7.1:
We are not-for-profit and formed for a defined public benefit.

Compliance Indicators

Compliance with the Commitments will be assessed against the following Compliance Indicators. All of the applicable Compliance Indicators must be met by every ACFID Member to be considered compliant with the Code. Each of the Compliance Indicators has one or more compliance Verifiers. Verifiers are the description of evidence that is required to substantiate compliance with each Compliance Indicator. Guidance is also provided.

7.1.1 Members define their public benefit and specify the rules to ensure that they operate as a not-for-profit entity.

A governing instrument, available from the member’s website, that includes the member’s purpose (a charitable purpose for the public benefit) and a rule requiring them to operate as a not-for-profit  

Guidance

Different organisations operate under different structures. While ACFID does not advocate the adoption of any particular model, the ACFID Code of Conduct requires that the structure of the signatory organisation is clearly documented through a governing instrument, with a clear statement of purpose that seeks to provide a benefit to the public, and clauses or rules that relate to charitable purpose or not-for-profit nature. A not-for-profit entity is one that does not operate for the profit, personal gain or other benefit of particular people.

The following are example clauses that would show that the organization is not-for-profit:

  • Not-for-profit clause: The assets and income of the organisation shall be applied solely in furtherance of its objects and no portion shall be distributed directly or indirectly to the members of the organisation except as bona fide compensation for services rendered or expenses incurred on behalf of the organisation.
  • Dissolution or Winding up clause: In the event of the organisation being dissolved, the amount that remains after such dissolution and the satisfaction of all debts and liabilities shall be transferred to another organisation with similar purposes which is not carried on for the profit or gain of its individual members.

Some Commonwealth, state and territory incorporating regulators provide template or ‘model’ governing documents for charities with certain legal structures.

The ACNC also provides a template constitution for a small company limited by guarantee with charitable purposes which can be found in the Resources Section below.

Good Practice Indicators

The following Good Practice Indicators describe a higher standard of practice than that set out in the Compliance Indicators. While Members do not need to meet the Good Practice Indicators to be considered compliant with the Code, they will self-assess against these indicators once every three years. This provides a clear pathway for Members to strengthen and improve practice over time.

  • Periodic review of compliance with organisational governing instrument is undertaken by the governing body. 

Good Practice Guidance

Here are some practical suggestions for your organisation to further deepen and improve practice over time.

Not-for-profit status

  • Include clauses in your governing instrument which clearly establish the non-for profit status and practices of your organisation
  • Being not-for-profit relates to how profits or surpluses are used. A not-for-profit organisation can still make a profit (or surplus), but assets and income can be used solely towards achieving the organisation’s objectives and not distributed among members.
  • Include a clause in your governing instrument describing how you would use any surplus

Governing body

  • Include clauses in your governing instrument which clearly establish the voluntary status and practices of your organisation.
  • If any member of the governing body was paid for work performed in a capacity other than as a member of the governing body, the organisation must disclose the payments made in their annual financial statements.
  • The inclusion of additional clauses in the governing instrument or the development of a governance policy or board charter could elaborate on the clauses within the governing instrument by detailing the reimbursement of any reasonable expenses incurred for governing body members for costs associated with attendance at meetings or in the conduct of their duties; and how governing body members carrying out other professional functions for the organisation such as a consultancy, will be remunerated.

ACFID Resources

Anglicans Overseas Aid Constitution

This resource is the constitution for Anglican Overseas Aid (AOA), an organisation dedicated to providing humanitarian assistance and development aid. This is suitable for emerging and small organisations as an example of faith-based organisation's constitution that is ACFID-compliant. Note the specific guideline about the Archbishop-in-Council approves the directors of Anglican Overseas Aid. This is relevant to the Code as a governing instrument, available from AOA’s website, that ...

Australian Medical Aid Foundation Constitution

This is the constitution of AusMed Aid Foundation (AMAF), an organisation dedicated to providing medical aid and support. It outlines the objectives, membership structure, governance framework, decision-making processes, financial management, and dissolution procedures of the organisation. This is relevant to the Code as an ACFID-compliant governing instrument available on the MAA's website.

Caring and Living as Neighbours (CLAN) Constitution

This resource is the constitution of CLAN (Caring & Living As Neighbours), a member organisation focused on child health. It suitable to emerging and small organisations as an example of an ACFID-compliant governing instrument that outlines the organisation's purpose, membership criteria, governance structure, meetings procedures, financial management, and dissolution procedures. It is relevant to the Code as a demonstration of policies in action.

Love Mercy Australia Constitution

This resource is the guarantee constitution for Love Mercy Foundation Ltd, a member organisation dedicated to improving the lives of communities in need. This is a suitable example of an ACFID-compliant governing instrument that emphasises the organisation's commitment to transparency, accountability, and ethical conduct in its operations. This is relevant to the Code as a demonstration of policies in action.

Muslim Aid Australia International Constitution

This resource is the constitution of Muslim Aid Australia International (MAA International), an organisation focused on providing humanitarian aid and relief. It is suitable for emerging and small organisations as an example of a constitution that encapsulates all MAA's essential rules, reflecting their status as a public benevolent institution (PBI), and demonstrating the executive board's deep involvement in all internal control processes to ensure alignment with MAA's core values and ...

Other Resources

ACNC template constitution for a charitable company limited by guarantee contains a comprehensive governing document level conflict of interest clause

This resource is a template constitution designed to assist a not-for-profit organisation incorporated as a company limited by guarantee with ASIC, aiming to register as a charity with the ACNC. This is suitable for charitable, not-for-profit companies limited by guarantee seeking to create a suitable governing document. It is relevant to the Code because it ensures alignment with legal requirements and best practices for governance in charitable organisations. It is also relevant for ...

Australian Charities and Not-for-profit Commission (ACNC)

This resource is the Australian Charities and Not-for-profits Commission (ACNC) website, which serves as a comprehensive hub for charities and not-for-profit organisations in Australia. The website offers guidance on various topics such as financial management, compliance requirements, reporting obligations, fundraising regulations, volunteering, and board responsibilities. It is suitable for emerging and small organisations. This is relevant to the Code because it offers ANGOs support, ...

Australian Securities and Investment Commission (ASIC)

This resource is the Australian Securities and Investments Commission (ASIC) website. The website is a comprehensive platform for information and resources related to corporate regulation and financial services in Australia. It suitable for emerging and small organisations in offering guidance and support for businesses, investors, and consumers on various topics such as company registration, corporate governance, financial reporting, and market integrity. This is relevant to the Code in ...

Responsibilities of the board and committee members

This resource outlines the responsibilities of board and committee members within nonprofit organisations. It covers key aspects such as legal duties, governance obligations, decision-making processes, and fiduciary responsibilities in Australia. It is suitable for emerging and small organisations, and emphasises the importance of effective leadership, transparency, accountability, and risk management in fulfilling the organisation's mission and objectives. This is relevant to the Code ...
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