ACNC Revokes Charities’ Registration

The charity status of two charities managed by the same directors has been revoked after the national charity regulator, the Australian Charities and Not-for-profits Commission, ruled their operations were not solely charitable.

The decision to revoke the charitable status of Care 4 Kids Foundation of Australia Ltd and Indigenous Foundation of Australia Ltd follows five months of investigation into the charities’ activities and purposes by the ACNC.

The ACNC says the investigations were undertaken with the charities’ cooperation however the regulator would not give details of what the charities were alleged to have done.

An ABC 7.30 investigation earlier this year reported that the one of the charities, children's education charity Care 4 Kids, was being investigated for issues around public and private benefit – and revealed “a failure to shed any light on the beneficiaries that the charity helps.”

The ACNC says both charities were given an opportunity to show cause why their registration should not be revoked and their responses were taken into account before a final decision was made.  

The ABC 7.30 Report said that according to a financial statements sent to the ACNC in the two years until June 30th, 2013, Care 4 Kids whose directors are based in the Philippines received nearly a million dollars in donations with around half a million dollars being paid to beneficiaries, but who these beneficiaries were was unclear.

ACNC Commissioner Susan Pascoe AM said the deregistration of the charities is a serious matter and it had been referred by the Federal Police to the regulator as the ‘fit for purpose’ regulator.

Pascoe said an organisation was entitled to registration with the ACNC if it met the requirements set out in section 25-5 of the Australian Charities and Not-for-profits Commission ACNC Act 2012.

Registration entitles charities to apply for a range of Commonwealth charity tax concessions, such as deductible gift recipient status, and income tax exemption. Charities lose these benefits if their charity status is revoked.

Care 4 Kids Foundation of Australia Ltd operates in New South Wales, Victoria, Tasmania and South Australia. Indigenous Foundation of Australia operates in New South Wales and Tasmania.

Both charities are managed by the same directors – Michael Johnson, Cherilyn Malbas and Edna O’Connor.  The charities’ revoked status is recorded on the National Charity Register at  www.acnc.gov.au/findacharity.

Commissioner Pascoe said that these directors are also involved with a for-profit organisation, Cancer Foundation of Australia Pty Ltd. This organisation was not a registered charity and not within the ACNC’s jurisdiction.

Commissioner Pascoe said that while overwhelmingly registered Australian charities were honest, professional and deserved public support, the Commission had dealt with more than 800 complaints or concerns about charities since its inception in December 2012.

“In most cases we work with charities to allow them to resolve any issues. The majority of complaints have been resolved with education and advice, or cooperative interventions where the ACNC has worked with the boards to rectify any concerns. This has resulted in improved practice,” Commissioner Pascoe said.

“However there are occasions, for example where charities rely heavily on public contributions and where public trust and confidence is at risk, when revoking registration is our last resort.

“We know from our high priority compliance cases progressed over the last four months the assets of those charities totalled in excess of $78 million. This has included protecting monies from going offshore. The potential loss of assets to the sector, and damage to the public’s trust and confidence in charities is significant if assets of this value are at risk.”

Earlier this week Breast Cancer Network Australia and the Australian Charities and Not-for-profits Commission had warned of for-profit companies, with names similar to those of well-known charities, posing as charities to the public.

Breast Cancer Network Australia (BCNA) Chief Executive Officer Maxine Morand said she was very concerned that one organisation that was not a registered charity had a near identical name to BCNA.

Susan Pascoe said the actions of a very small group of charities could taint the reputation of others and it would be up to the Federal Police to take any further action against the de-registered charities.

Members of the public with a concern about a registered charity can visit www.acnc.gov.au or contacting the ACNC on 13 22 62, or email advice@acnc.gov.au