ACS to keep its tax-free status
Brisbane take-over: The River City Labs acquired by the Australian Computer Society
The Australian Computer Society says that its leap into the tech commercialisation space won’t impact its status as a charity status with the regulator, even though it has plans to broker VC investment deals with member startups.
The professional association announced last week that it had acquired Steve Baxter’s Brisbane-based startup incubator River City Labs Group and that it had set aside $7.5 million to expand its operations nationally, starting in Melbourne.
The terms of the deal between RCL and ACS have not been disclosed.
ACS Chief Executive Andrew Johnson told InnovationAus.com the organisation would not to take equity positions in any of the startups that RCL will cultivate for commercialisation.
“We have no intention of taking equity positions at this time. Our five year Strategic Plan does, however, foresee a potential role to broker angel and seed funding for early stage technology,” he said.
“We were successful in this process partly because of our intention to, as Steve Baxter put it, supercharge River City Labs, and the investment will be a key part of this.”
Nor would the fact that RCL’s startups would be developed with a view to becoming commercial giants pose any threat of disruption to the prudential rules that govern ACS’ tax-free charity status.
“This acquisition is compliant with regulatory requirements for NFP’s so no additional changes are needed. All funds and property of the ACS are under the control of Management Committee, the equivalent of a company board. There is nothing in the ACS Rules or ACS National Regulations that prohibits the acquisition of assets,” Mr Johnson said.
“River City Labs aim has always been to provide support for start-ups and scale-ups to help them achieve commercial success, and since it was founded it has operated as a not-for-profit," he said.
"It will now, effectively, become a wholly owned subsidiary of ACS which will continue to operate as a Not for Profit."
For a charity, the ACS has balance sheet which would be the envy of many profit-driven commercial businesses.
Recent high demand for the charity’s skills assessment services for workers seeking temporary visas has seen its income from fees for professional standards grow from $21.4 million at the end of June 2016 to $28.1 million at the end of the last financial year, according to reports it has filed with the Australian Charities and Not-for-Profits Commission.
During the same period it reported that its income from membership fees has remained flat, dipping slightly from $3.5 million in FY2016 to $3.4 million last year. It ended FY2017 with cash and equivalents on hand of $15.8 million (down from $20 million in FY2016.)
It’s yet to file its financial reports for the 2018 financial year with the ACNC.
The ACS is one of a number of organisations and professional associations that provide the Department of Home Affairs with assessment services for skilled migration.
A large amount of content on the ACS’ web site is targeted at offshore workers considering applications temporary skilled migration visas.
In recent times, the ACS has ramped up a prominent branding campaign including national advertising on buses, trains and transport networks and it last year secured the services of Entourage star and tech entrepreneur Adrian Grenier – AKA Vinnie Chase – for its 2017 Reimagination event.