We are often called in to “rescue” charity applications which have either been unsuccessful or which look like they will be refused.
Here we discuss what we routinely see going wrong in applications prepared by others, and our approach to addressing and resolving these issues.
If you or your organisation is in the process of setting up or applying for charity status, don’t hesitate to get it touch with us – we are charity experts and well-placed to assist with all aspects of the application process, as well as charity operations and governance generally.
1. Sometimes less is more
The ACNC’s online application process is itself very straightforward and, with a few exceptions, almost all of the questions have been designed to be answered by a non-lawyer.
As the questions are designed to draw out all of the information the ACNC needs to make its decision, there is often little need to provide anything further to what is being asked.
Despite this, we have seen several instances where an applicant’s well-meaning advisors include a detailed letter in support.
Invariably these letters start by providing helpful background to the applicant’s purpose and intended activities, but then undo that good work by outlining a history of the law of charity, quoting Elizabethan statutes and English legal precedent from the 1800s.
Our approach and our assumption has always been that the ACNC and its staff are keenly aware of the laws and systems they administer and regulate.
Providing an explanation of charity law does more harm than good – it turns a 5-page application into a 40-page application and, in many cases, highlights non-issues which the ACNC has to respond to.
That is not to say that a letter in support is always a bad idea.
There are instances where a supporting letter is helpful to pre-empt the ACNC’s concerns (as far as possible) by acknowledging an issue and providing an explanation as to how that issue will be resolved or is not actually an impediment to the grant of charity status.
For example, if a charity is going to conduct any of its activities overseas, then we recommend the applicant adopts a series of policies before applying to the ACNC which ensure the applicant will comply with the External Conduct Standards.
However, in our experience a 20-page treatise on the law of charities is rarely helpful – let the ACNC review the material and, if necessary, ask for further information.
2. Know the process, and work with the ACNC
The ACNC is not backwards in coming forwards if they require further information, or they consider there is an issue with an application.
There is usually a good reason for this, and so we treat this as an opportunity to work with the ACNC to get the application across the line.
The alternate approach is to engage in (sometimes quite heated) debate over whether an issue arises, or whether it has been given the correct level of consideration.
In our experience this is rarely productive – the ACNC is the regulator and the gatekeeper and should be treated accordingly.
It is frankly not in anyone’s interests (especially the client’s) to make the process any more difficult or drawn-out than it already is by behaving unreasonably or refusing to budge on a particular issue.
We operate on the basis that the ACNC is not necessarily trying to say “No” to applications, and where there is an issue, we try to work with the ACNC and the applicant to resolve these to everyone’s mutual satisfaction.
3. Know when to withdraw and resubmit
There is nothing wrong with withdrawing an application.
Too often we have seen applicants and their advisors go back and forth with the ACNC over a particular point or legal issue to no avail.
It is at this point the ACNC will generally provide the applicant with a “Notice of Intention to Refuse”. This is essentially a signal from the ACNC that the applicant’s arguments haven’t been successful, and the issues with the application have not been resolved.
The Notice will then give the applicant a final chance to withdraw the application.
Unless there is a compelling reason not to, our approach is always to withdraw the application and start again. Doing so avoids the need for the ACNC to make a formal decision (which is very difficult to reverse) and provides a bit of breathing room to amend the application and possibly reassess the overall structure and strategy.
The alternative is a time-consuming and costly legal process to try to overturn the refusal decision, with no guarantee of a positive outcome for the client.
Contact us to discuss how we can assist in your charity application.