Dr Gary Johns has recently been appointed the new commissioner of the Australian Charities and Not-for-profits Commission (ACNC), a post he is expected to hold for the next five years.

According to an article in The Conversation, many believe that his tenure at the post will lead to big changes in the agency’s oversight and regulation of the nonprofit sector.

The Importance of “Profit” in the Not-for-Profit Sector

Johns has expressed the opinion that collectively, nonprofits function as a type of market. Johns has stated his belief that if the public were given the right type of data about a charity or association’s performance, they would naturally make better decisions about which nonprofits should be funded, and, which should not.

Given his beliefs, charities and other nonprofits can expect increased pressure to apply for-profit, business-based practices to their operations to improve their efficiency.

Is Giving a Business?

NFPs have long been encouraged to look for ways to use their cash and other resources wisely so that they can continue to benefit their communities in the long term. Looking at the entire sector as simply another type of business, however, is dangerous because it overlooks the reasons why people give to charity in the first place.

When we give to nonprofits, most of us are not acting as a consumer searching for a commodity to buy. Rather than being influenced by things such as price, supply and usefulness, most of us are primarily motivated to give by our passion for a specific cause. Having a personal connection to the people who work with a specific charity, or that benefit from its operations can also sway our decision to contribute. Our faith and personal belief systems also play a role in whether we support a given nonprofit.

Equal Justice Under the Law?

As reported in a recent article in the Sydney Morning Herald, there is also significant concern that Johns could use his new role to help the government silence some of its critics in the charities sector.

Johns’ supporters claim that he will use his position to simply enforce “the law” when it comes to regulating the sector. This seemingly innocuous statement is concerning given the government’s recent plan to move to block charities from accepting overseas contributions if they are involved in advocacy for various social causes.

The Impact for Nonprofit Practices

In the light of Johns’ past comments, and recent changes to the law, nonprofits can rightfully expect greater scrutiny of their finances, and fundraising activities, in the future. To ensure that your nonprofit remains in compliance with existing reporting requirements and potential changes, treasurers and other board members should review their internal processes now. Be on the lookout for ways to improve the accuracy of your reporting, increase transparency in the decision-making and make it easier and more secure to keep and maintain NFP records.

If you haven’t done so already, consider upgrading your accounting software to one like Admin Bandit that makes it easy to meet ACNC requirements since it automates many common bookkeeping and reporting tasks, and stores information securely in the cloud.