Updating your Constitution

By Nick Koerbin

According to a recent Association Executive Services' webinar with Jennifer Moltisanti from the Australian Taxation Office, most associations or not-for-profit organisations in Australia must soon review their governing documents as part of their self-assessment process for claiming not-for-profit status.

💡 This includes your organisation's constitution, known as governing rules, memorandum of association, or charter. It is not just a set of guidelines; it is a legal document, a contract, and its terms must always be adhered to by all members, including the Board.

💡 In the ever-evolving NFP sector, organisations often find themselves on a different trajectory. Their current objectives and activities might not align with those stated in their constitutions. Regular reviews are not just important, they are crucial to ensure alignment.

💡Unfortunately, this is often one of the jobs that gets kicked down the road. The number of constitutions our consulting team has reviewed that need to be updated or aligned with the organisation's direction and purpose is alarming.

💡We are noticing that some not-for-profit organisations are now fined by regulators for not complying with their constitutions.

💡If your constitution looks like it was written on a typewriter, it is time for an update.

However, it's not only constitutions written before the invention of the computer that would benefit from a review.

Updating your constitution is not just a task; it's a responsibility. It's an opportunity to ensure the document reflects contemporary legal requirements and your current operations.

This can lead to better governance and a more effective organisation, and it's up to you to make it happen.