Answers
What strategy is a not-for-profit board obliged to hold? None, as a standard.
No ACNC Governance Standard requires an Australian charity to have a strategy or a strategic plan. What Governance Standard 5 requires is that Responsible People act with reasonable care and diligence, and honestly and fairly in the best interests of the charity and for its charitable purposes. The obligation is to the duty, not to the document. General information, not legal or governance advice.
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Why boards get this wrong
The requirement people think they are meeting.
Ask around a not-for-profit board and somebody will say the ACNC requires a strategic plan. It does not, and acting on that belief produces a predictable document.
Three versions of the same mistake
The plan written to be filed
Produced once, formatted for an audience that never asked for it, and referred to again only when the next one is due. It satisfies nobody, least of all the regulator, who did not request it.
The plan with no measures
Aspirations against the charitable purpose, with nothing that could be false at the end of a year. Nothing in the duties asks for measures, and nothing in the duties is served without them.
The plan the executive has not seen
Approved at board level and never cascaded, so the people delivering the purpose are working to something else. The board has governed a document rather than the organisation.
What the rules actually say
Duties, reporting, records.
How it works
Standard 5: the duties of Responsible People
The ACNC lists six duties a charity must take reasonable steps to ensure its Responsible People comply with. Quoted from the regulator: to act with reasonable care and diligence; to act honestly and fairly in the best interests of the charity and for its charitable purposes; not to misuse their position or information they gain as a Responsible Person; to disclose conflicts of interest; to ensure that the financial affairs of the charity are managed responsibly; and not to allow the charity to operate while it is insolvent.- Six duties, none of which names a plan
- Care and diligence is the one strategy sits under
- The purpose is what the duties point at
What is genuinely required of the charity
Reporting annually through the Annual Information Statement, notifying the ACNC of changes, keeping records, and having a governing document stating charitable purposes for the public benefit. None of those is a strategy. The ACNC's own guide describes developing or approving a strategic plan as something Responsible People usually do, which is a description of the role rather than a rule.- Annual Information Statement
- Notify changes, keep records
- Charitable purposes in the governing document
So why hold one at all
Because the duty is hard to discharge without it. A board asked later whether it acted with reasonable care and diligence in pursuing the purpose has an easier answer if it can show what it decided to pursue, what it measured, and what it did when a measure moved the wrong way. That is a plan being used as evidence of governance rather than as a compliance artefact, and it is a different document from the one written to be filed.A practical test
Six questions a board can answer in a meeting.
None of these come from a standard. They are the things that make a plan useful to the duty rather than decorative beside it.
The test
Can every board member name a priority?
Not read one off a page. Name one. If not, the plan exists but the board is not governing against it.
Does each priority have an owner?
A named person, not a committee. Shared ownership of a charitable objective usually means nobody is accountable for it.
Could any measure be wrong at year end?
If nothing in the plan could turn out false, nothing in it is being tested, and the board has no way to notice a problem early.
Does the executive work to the same document?
A board plan and an operational plan that differ is the commonest governance gap in a charity of any size.
Is it reviewed between annual cycles?
A plan opened once a year is a record. Care and diligence is continuous, and so is the evidence of it.
Would it help you explain a decision?
The real test. If a funder, a member or the regulator asked why you chose this over that, does the plan answer it?
Questions
Questions about not-for-profit strategy obligations
Does the ACNC require a charity to have a strategic plan?
No. None of the ACNC Governance Standards requires a charity to hold a strategy or a strategic plan. The expectation comes from Governance Standard 5, which requires Responsible People to act with reasonable care and diligence and in the charity’s best interests for its charitable purposes. This is general information rather than legal or governance advice.
What are the duties of Responsible People under Standard 5?
The ACNC lists six: to act with reasonable care and diligence; to act honestly and fairly in the best interests of the charity and for its charitable purposes; not to misuse their position or information gained as a Responsible Person; to disclose conflicts of interest; to ensure the financial affairs of the charity are managed responsibly; and not to allow the charity to operate while it is insolvent.
What is a charity actually obliged to report?
Annually, through the Annual Information Statement. Charities must also notify the ACNC of changes, keep records, and have a governing document stating charitable purposes for the public benefit. A strategy is not among the things that must be filed.
If it is not required, why do boards keep being told to have one?
Because developing or approving a strategic plan is usually described as a Responsible Person task, which is a description of the role rather than a rule. Over time that gets repeated as an obligation, and boards produce a document for a requirement that does not exist.
What makes a not-for-profit plan useful rather than decorative?
Owners against each priority, measures that could be false at the end of the year, and review between annual cycles. A board asked whether it acted with care and diligence has a far better answer if it can show what it chose to pursue and what it did when something moved the wrong way.
Does any of this apply to a not-for-profit that is not a registered charity?
The ACNC Governance Standards apply to charities registered with the ACNC. A not-for-profit that is not registered sits under its own incorporating legislation and its constitution instead, so the obligations differ and are worth checking directly rather than assumed from this page.
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