What Checks Should a Charity Complete Before Funding an Overseas Partner?

Last updated: 25 October 2026.

Funding an overseas partner is one of the most common ways Australian charities deliver programs, and one of the riskiest. The money leaves your bank account and your direct control. That is why the ACNC expects boards to take “reasonable steps” before and after funds move, and why the first of those steps is checking who you are dealing with.

This guide sets out the checks the ACNC suggests, how to scale them to the size of the risk, and how to keep evidence of each one. It is general information based on ACNC and DFAT guidance (checked 25 October 2026), not legal advice. For significant funding, or where sanctions could apply, take advice from a lawyer experienced in charity and sanctions law. We help with the financial side: budgets, transfer records, monitoring reports and board reporting.

The short version: confirm the partner is legitimate, check sanctions and listed terrorist organisation lists, review their track record and controls, put the arrangement in writing, move money through formal banking, and monitor and record what happens. The greater the risk, the more you need to do.

Proportionate, not paralysing

The ACNC says due diligence does not need to take lots of time, people or money, because a lot of information is available, often for free. It says to take a proportionate, risk-based approach: a lighter process for a simple cooperative arrangement than for a larger, formal partnership. The ACNC also says that finding something in your research does not necessarily end the relationship. The question is what your charity can manage and what it cannot. In its External Conduct Standard 1 guidance, it adds that a large charity with operations in several countries needs to do more than a small charity giving a modest amount to one charity overseas.

The checklist

1. Identity and legal status

  • Confirm the partner’s legal structure and registration, and that the people you are dealing with are legitimately acting for the organisation.
  • Understand ownership and who controls the organisation, including any related organisations.

2. Sanctions and listed terrorist organisations

  • Check whether the partner, or associated individuals, are subject to sanctions or associated with organised crime or terrorist groups.
  • Check the Department of Foreign Affairs and Trade (DFAT) Consolidated List to see whether you would be dealing, directly or indirectly, with a designated person or entity.
  • Check the Australian Government’s list of listed terrorist organisations. The ACNC warns that a charity may commit a criminal offence if it is connected to, or supports, a listed terrorist organisation.
  • Keep a copy of every search, with the date.

3. Reputation and history

  • Ask the partner to disclose any civil, criminal and regulatory matters.
  • Search for adverse media, including online and social media.
  • Review annual reports, submissions and, where possible, references from other funders and people who know the partner.

4. Capability and controls

  • Check the partner has appropriate management policies and procedures, including financial controls, and can do what the agreement requires.
  • Check how they manage conflicts of interest and fraud and corruption risk. Under External Conduct Standard 3, you are expected to take reasonable steps to minimise those risks among third parties outside Australia and to document perceived or actual material conflicts of interest.
  • For work with children or vulnerable people, ask for Working with Children Checks, police checks or similar, and their safeguarding policies. External Conduct Standard 4 expects reasonable steps to protect vulnerable individuals overseas.

5. Country risk

  • Understand the risks associated with each country you send assets to or operate in, including corruption, conflict, safety for staff and volunteers, and whether banking is available.
  • Remember that your charity must follow the laws of the countries in which it operates, as well as Australian law.

6. The agreement

  • Put a written agreement in place that sets out roles and responsibilities. The ACNC lists this as a reasonable step.
  • Include reporting requirements, how funds may be used, record access, what happens if funds are misused, and an exit strategy. The ACNC’s partner guidance recommends thinking about the exit strategy at the beginning.

7. Money movement

  • Use secure, monitored services such as formal banking, and ask the recipient to confirm receipt.
  • Consider paying on a periodic basis and withholding future transfers if necessary, as the ACNC suggests.
  • If you use a remittance provider, the ACNC recommends checking that it is registered with AUSTRAC.
  • Require approval of funds and projects by more than one person.

Scaling the checks to the risk

SituationReasonable level of checking
Small, one-off grant to a well-known registered charity in a stable country with formal bankingIdentity and status, sanctions and listed-organisation searches, basic written agreement, confirmation of receipt, one acquittal report
Ongoing funding of a local partner delivering a programThe full checklist above, a formal agreement, periodic payments, regular progress and financial reports, board review
Work with children or vulnerable people overseasThe full checklist plus safeguarding policies, background checks and stronger monitoring
Operating in or near conflict areas, or where banks are not availableHigher scrutiny: documented risk assessment, legal advice, strict cash controls, frequent reporting. Seek specialist advice before proceeding

That table is our illustration of proportionality, not an ACNC rule. The ACNC does not prescribe what a charity must do.

After the money moves: monitoring

Due diligence is not a one-off. The ACNC lists these steps: monitor overseas projects, including those run by third parties, and ask for regular reports on progress and finances; review progress reports at each board meeting; keep a register of equipment; and establish procedures to detect wrongdoing, including keeping transaction records and checking them against approved funding levels. The ACNC’s partner guidance also recommends periodic reviews of performance, compliance with the agreement and risks, and has a partnership review template.

Keep the evidence

The ACNC says it is a good idea to record the due diligence steps, including copies of sanctions and terrorist list searches, a risk register and regularly reviewed policies, and to retain risk assessments. Under External Conduct Standard 2, records of the third parties you work with, your monitoring, and your overseas expenditure by country must be kept for at least seven years. Our guide to records a charity should keep when sending money overseas shows how to organise this by country and partner.

Where the finance team fits

  • Test the partner’s budget for reasonableness and compare it to actual reports.
  • Set up tracking by country, partner and project in your accounting system. See how to set up Xero for a charity or NFP.
  • Reconcile transfers to approvals and partner confirmations.
  • Prepare a regular overseas funding summary for the board, as part of your monthly treasurer’s report.

How we help

We help charities keep the financial evidence trail for overseas funding: budgets, transfer registers, tracking by country and project, and board-ready reporting. Our work does not replace legal advice on sanctions or overseas law. See our charities and NFPs page, try the free Charity Health Check, or email info@guidancegrowth.com.au.

Frequently asked questions

What due diligence should a charity do on an overseas partner?

The ACNC suggests confirming legal structure and registration, checking sanctions and terrorist lists, asking about civil, criminal and regulatory matters, searching adverse media, and obtaining police or Working with Children checks where relevant. The extent should match the risk.

Which lists should we check for sanctions?

The ACNC points charities to DFAT’s Consolidated List for sanctions and to the Australian Government’s list of listed terrorist organisations. Keep a copy of each search.

Is a written agreement with an overseas partner required?

The ACNC lists written agreements that set out each party’s roles and responsibilities as a reasonable step, and says charities often use memoranda of understanding or other written agreements.

Can we pay an overseas partner in cash?

The ACNC recommends formal banking where it exists. If large payments are made in cash, you should be able to show why cash was chosen, keep detailed records and manage the risk.

What if our checks find something concerning?

The ACNC says a finding does not necessarily end a relationship. Decide whether your charity can manage the issue, document the decision and consider legal advice for serious matters.

How long should we keep due diligence records?

At least seven years under the ACNC’s record-keeping and External Conduct Standard 2 guidance.

Sources and further reading

This article is general information, not personal advice. Rules and dates can change, so check ato.gov.au or acnc.gov.au for the latest, or speak to us about your situation.

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