Related party transactions are a governance issue for every charity, but they get more complex once you operate overseas, where board members may have connections to local service providers, partners or the communities you serve. Understanding what counts as a related party, what has to be disclosed, and how to manage the resulting conflicts of interest matters for both compliance and public trust. The ACNC takes this seriously, failing to disclose properly can mean regulatory action and reputational damage.
What counts as a related party
Under Australian accounting standards and ACNC guidance, related parties fall into three groups.
Responsible people. Board members, committee members and trustees, plus their close family (spouse, children, dependants).
Key management personnel. The CEO, executive director and senior managers, plus their close family.
Organisations with significant influence. Entities a responsible person controls or has significant influence over, including overseas service providers connected to a board member.
What counts as a related party transaction
Any transaction between your charity and a related party counts. Goods and services purchased from a board member's company, property leases or transfers involving related parties, loans or guarantees to or from related parties, professional fees for legal, accounting or consulting services, hiring a board member's family member, and grants to a connected overseas organisation are all examples.
What you have to report, by size
| Charity size | Annual revenue | Reporting requirement |
|---|---|---|
| Small | Under $500,000 | Report "reportable transactions" in your Annual Information Statement |
| Medium | $500,000 to $3 million | Disclose material transactions in your financial reports |
| Large | Over $3 million | Disclose material transactions in your audited financial reports |
Managing the conflict
When a related party transaction comes up, work through it in order. Declare the conflict in advance, record it in your conflict of interest register, exclude the conflicted person from the decision, document the decision and the reasoning behind it, and make sure the terms are arm's length, in other words fair market value, not a favour.
Where charities get this wrong
The most common mistakes are not identifying every related party in the first place, failing to disclose a transaction that turns out to be material, letting a conflicted person vote on the decision anyway, not keeping records of the disclosure and decision, and assuming a small transaction does not count. None of these thresholds are about the dollar value alone, they are about whether the relationship could look like it influenced the decision.
Where to go for help
See the ACNC's guidance on related party transactions directly.
If you are not sure whether something you are planning counts, that is exactly the kind of question our operations and compliance work can help you work through before it becomes a reporting problem. Get in touch.
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Synergaid Team supports humanitarian organisations with practical systems, clear processes and honest advice.