Adult Stem Cell Foundation Australia Limited’s charity status revoked

On the 11th of September 2015, the Queensland based organisation Adult Stem Cell Foundation Australia Limited (ASCFAL) had its charity registration revoked by the Australian Charities and Not-for-profit Commission (ACNC) after a review into its operations and activities was conducted by the ACNC.  This means it will no longer be eligible for charity tax concessions, such as exemption from income taxes, deductible gift recipient status and fringe benefits tax concessions.

ASCFAL was registered as a health promotion charity under the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (Act). Its mission statement highlights its aim as being a source of information for patients, doctors and researchers on developments involving adult stem cells. The founder of the charity has stated that the issues that resulted in the cancellation of its charity status were related to the structure and governance of the foundation rather than to any financial impropriety or mismanagement.

Under Div 35-10 of the Act, the ACNC has the power to revoke a charity’s registration where it reasonably believes that the charity:

  • is not entitled to be registered;
  • has provided false or misleading information; or
  • has contravened, or is likely to contravene, the Act or has not complied with standards of governance and external conduct.

This is an important reminder for all charities to ensure that their governance procedures are up-to-date and comply with the requirements under the Act.

In the past 2 years the ACNC has received over 1300 complaints about the conduct of charities. Most of these complaints have been resolved by way of education and advice to the charities.  However, these complaints have also resulted in 12 organisations losing their charity status and associated tax concessions. 

The ACNC has stated that it takes a ‘proportional approach’ to compliance and gives preference to educating and supporting charities in meeting their obligations under the Act over revoking a charity’s status. The ACNC has stated it will resort to revocation of charity status only in the most serious of cases where exceptional circumstances exist which result in the charity being unwilling or unable to meet its obligations.

Under the Act, charities have 60 days from the date of notice of revocation, to request an internal review of the ACNC’s decision.  To date however, no reviews of this kind have been successful in achieving reinstatement of the charity involved.

Charities should review their internal governance standards and practices and seek legal advice where necessary to ensure compliance with their obligations under the Act.

For more information, please contact:

Ashleigh Wall
Senior Associate
T: 03 5226 8559
E:awall@harwoodandrews.com.au

Dianne Sisak Penjalov
Senior Associate
T: 03 5226 8582
E: diannes@harwoodandrews.com.au

Ella Vines
Graduate Lawyer
T: 03 5225 5216
E: evines@harwoodandrews.com.au