The national charity regulator is conducting a risk assessment for terrorism financing and money laundering in the not-for-profit sector.
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The Australian Charities and Not-for-Profits Commission will work with the Australian Taxation Office and the Australian Transactions and Reports Analysis Centre to conduct the assessment on the sector's organisations.
A mix of data from the sector, combined with academic research and intelligence gathered by law enforcement agencies will underpin the assessment.
The risk of money laundering and terrorism financing, indicators of high-risk organisations, groups of charities that would benefit from targeted support and vulnerabilities that could be exploited to support terror groups are among the issues to be assessed. Charity operators have also filled in an anonymous survey.
The commission said the assessment would develop a whole-of-government framework to ensure the sector was monitored appropriately, investigations of at-risk non-profits were co-ordinated across agencies and outreach to charities and not-for-profits was secure.
The ACNC first flagged the risk of terrorism financing early last year, warning that charities could be misused to benefit either terror groups or groups fighting in foreign conflicts.
It released guidelines, including a checklist for overseas charities in an attempt to prevent Australian charities from inadvertently or deliberately using funds or assets to finance terrorist groups, as well as the infiltration of organisations by members of terrorist groups posing as employees.
"While overwhelmingly charities operate honestly and professionally, there is nonetheless the risk of misuse for illegal or improper purposes," Commissioner Susan Pascoe said at the time.
"The heightened risk means all charities must take reasonable precautions and exercise due diligence to ensure that funds are not inadvertently directed towards terrorism."
An regional risk assessment for Southeast Asian countries, including Australia, was conducted earlier this year.
Some 4000 registered Australian charities and not-for-profits operate overseas.
The findings of the assessment are expected to be published early next year.
