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Top 5 need-to-knows for charities and not-for-profits in 2023

Native Title & Public Interest Law
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In this update, Arnold Bloch Leibler’s Public Interest Law team provides its list of the top five things charities and NFPs need to be aware of now that the New Year is well under way.


1.   DGR Registers Reform

Treasury has released draft legislation to implement reforms first announced in 2017 to transfer administrative responsibility for four DGR registers from portfolio agencies to the ATO.

The four DGR Registers are the:

  • Register of Cultural Organisations
  • Register of Environmental Organisations
  • Register of Harm Prevention Charities, and
  • Overseas Aid Gift Deductibility Scheme.

Arnold Bloch Leibler has made a submission to Treasury reiterating our earlier support for these reforms and maintaining our position that the ACNC is best placed to administer and assess eligibility for entry to the four registers.

Our submission includes recommendations to remove the gift fund and non-conduit requirements and clarify that Harm Prevention Charities can pursue their purposes overseas. We also submit that the legislation needs to give further consideration to how the reforms will work for faith based organisations and Item 1 DGRs (such as Public Benevolent Institutions) that also operate an overseas aid fund.

You can read our full submission here.

2.   Fundraising is being fixed!

After decades of determined advocacy, including through Justice Connect’s influential campaign to #fixfundraising, we’re thrilled that fundraising regulations are being harmonised and simplified across the country.

While many states and territories have made changes in recent years to reduce the administrative burden of maintaining multiple fundraising licences, the joint announcement by the Hon Dr Andrew Leigh MP (Federal Assistant Minister for Charities) and the Hon. Danny Pearson (Victorian Minister for Consumer Affairs) takes this one step further with the publication of a new set of national fundraising principles that have been agreed to by all states, territories and the Commonwealth.

We look forward to seeing the implementation of the national principles, which will require regulatory changes or legislation in each participating jurisdiction.

3.   Government announces Productivity Commission inquiry into philanthropy 

We welcome the recent announcement of Terms of Reference for the Productivity Commission to undertake an inquiry into philanthropy.

Due to report in the first half of 2024, the Productivity Commission has been tasked with providing a roadmap to achieving the government’s objective of doubling philanthropic giving by 2030 and will consult broadly. We are hopeful that the inquiry’s focus on encouraging more philanthropy will be matched with consideration of what makes for better philanthropy, including addressing power imbalances, investing for social impact and reviewing the work that has gone into the Paying What it Takes movement.

The Productivity Commission will also have regard to previous inquiries, including the 2010 Contribution of the Not-for-Profit Sector inquiry which recommended progressively widening the scope for deductible gift recipient endorsement. This sensible recommendation was built upon by the Not-for-profit Sector Tax Concession Working Group’s Report on Fairer, simpler and more effective tax concessions for the not-for-profit sector in 2013 and in our view remains a major opportunity.

4.   Updates from the ACNC

There has been a lot of positive action at the charities regulator since the appointment of new ACNC Commissioner Sue Woodward AM late last year.

The ACNC is currently conducting public consultation regarding how it will collect information from charities about their related party transactions in the 2023 Annual Information Statement. A related party transaction is a transfer of resources, services or obligations between related parties. “Related parties” is defined according to the size of a charity.  You can view the ACNC guidance here. The ACNC is particularly keen to hear from small charities. You can fill out a five minute survey here or send additional feedback to [email protected] before 16 March 2023.

The ACNC has also published new guidance on the risks and benefits of accepting crypto-assets. For more information on the tax implications of donating digital money, you can read a paper by ABL Special Counsel Bridgid Cowling together with tax lawyer Eileen Liu and tax partner Shaun Cartoon, which was published in the Australian Tax Review and commended by the Law Council of Australia to the Board of Taxation here.

Separately, we are looking forward to the publication of updated Commissioner’s Interpretation Statements on public benevolent institutions and health promotion charities. You can read ABL’s submissions to the latest consultation on the Public Benevolent Institution Interpretation Statement here.

5.   Self-assessment changes for Income Tax Assessment

A reminder that from 1 July 2023, non-charity NFPs with active ABNs will be required to lodge an annual self-review return to access an income tax exemption.  These self-review returns will need to be submitted to the ATO after 30 June 2024 and may be confirmed or amended in subsequent years, avoiding the need to submit the same information every year.

If a return is not lodged, the NFP may become ineligible for an income tax exemption and penalties may apply.

This will not affect ACNC registered charities but organisations that will be affected include sporting clubs and non-charity community service organisations.

This measure was announced as part of the 2021-22 federal budget and is designed to enhance transparency in the NFP sector and ensure only eligible NFPs are accessing income tax exemptions.

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