Circular – 17 December 2020
Australian Charities and Not-for-Profits Commission (ACNC) Commissioner’s Letter
A letter addressed to all RSL NSW members has been received from the Australian Charities and Not-for-Profits Commission (ACNC), in response to RSL NSW annual reporting against its Enforceable Undertaking obligations. Please click on this link to read the letter.
The RSL NSW Board of Directors request that sub-Branch Presidents brief all members on the letter and confirm to their respective District Council by 15 March 2021 that this has been completed.
The letter draws attention to sub-Branch obligations as a charity and suggests some reading and other materials to support compliance. The RSL NSW Board is very aware of the onerous compliance requirements of the ACNC and NSW Fundraising Acts and therefore, under the ‘umbrella’ of the Strategic Plan, intends to ensure all sub-Branch executives receive appropriate support and assistance in discharging their responsibilities.
The Board has received considerable feedback about the decision to cease the practice of sub-Branches subsidising members’ annual fees. An interim policy has been approved to direct sub-Branches in meeting their obligations if they need to support members in financial distress.
Sub-Branches may subsidise RSL NSW membership fees if it is for a service member (veteran) who is in “genuine need of financial assistance”. As sub-Branches are registered charities, they need to record the subsidy as a charitable donation to a veteran in need to meet their compliance obligations.
Definition of “genuine need”
At the discretion of the sub-Branch executive, a veteran is deemed in ‘genuine need’ of financial assistance if he/she is not in a financial position to pay their annual membership fees. This could, but is not limited to the following circumstances:
- They have a low fixed income i.e. pension or low fixed-income retiree
- They rely on income support, i.e. Centrelink payments
Background and Implementation
This issue has arisen for two reasons:
- A member of a charity cannot be provided with financial benefit by virtue of their membership. However, in the case of RSL NSW, supporting veterans and their families is the charitable purpose. Therefore, if the member is a veteran and in need of financial assistance financial support can be provided from charitable funds. It is defined as ‘necessitous’ by the ACNC Act, 2012 and Charities Act 2013.
- Many sub-Branches rely on income from membership fees and local fundraising to undertake their charitable purpose, including annual commemorations. These sub-Branches do not have the means to subsidise their allocated members’ fees and recognise that the Support and Assistance fund is not for this purpose, nor is it appropriate for ‘wealthy’ sub-Branches to subsidise membership fees by providing direct funding.
In October 2020, the Board agreed to an interim policy with an accompanying procedure that will enable sub-Branches to subsidise fees if the person is in ‘genuine need’ and this is recorded by the sub-Branch to meet their regulatory compliance obligations under Section 55-5 of the ACNC Act, 2012. Procedurally, a simple record of the decision and reason why a member has received the donation is required.
Also, in October 2020 the Board approved the RSL NSW Strategic Plan (2021-2026). This plan considered member feedback and therefore there will be NO membership fees from Calendar year 2022, hence the policy above is only interim. This recognises that RSL members are volunteers who are providing support to fellow veterans, not just to members of the RSL in accordance with the charitable purpose.
Membership fees do not necessarily mean ‘capitation’ fees, and these are yet to be set. If the proposed funding model to support the strategic plan and strategic initiatives is adopted, there will be no need for capitation fees for RSL National for instance, or ANZAC House.
If sub-Branches identify veterans in serious financial hardship, the veteran should be referred to RSL DefenceCare. RSL DefenceCare (recipient of RSL NSW sub-Branch donations and our principal service delivery organisation) is set up to deal with privacy and associated compliance matters related to providing financial assistance.
Recording donation for membership subsidy – Example