Options Paper - Australia’s Charities and Not-for-profits

The Options Paper, Australia’s Charities and Not-for-profits has been released to seek feedback on proposed arrangements for charities in Australia following the Government’s planned repeal of the Australian Charities and Not-for-profits Commission (ACNC). The Government’s proposed arrangements attempt to balance reducing the administrative burden of reporting obligations with the need for public accountability.

The approach is consistent with the Government’s agenda for deregulation which is expected to reduce costs for business, community organisations and individuals by at least $1 billion annually.


The ACNC and the ACNC Commissioner have powers to collect information for monitoring and control functions to regulate charities. While registration with the ACNC is voluntary, many laws have been changed since the introduction of the ACNC to make ACNC registration a requirement to receive tax concessions. This has inadvertently forced charities to register with the ACNC.

Proposed reporting arrangements

The Options Paper outlines the proposed arrangements which reflect the Government’s view that charities work hard to build the trust of the Australian public and their longevity relies on this trust. Therefore, charities should be presumed to operate in the interests of those they serve and in accordance with their purpose.

As part of the self-reporting and self-management of charities, the Government is proposing all charities maintain a publically accessible website that features the following information:

  • Names of responsible persons;
  • Details of all funding received from the Government; and
  • Financial reports.

Charities will have the option of making more information public if they choose to do so. It is believed the public information will provide an insight into how charities spend their funding and instil a level of confidence in members of the public who are contemplating making donations.

Charitable status

It has been proposed that a dedicated function in the Australian Taxation Office (ATO) is established to determine charitable status and related tax concession. Concerns have been raised that the ATO is inherently conflicted in granting tax concessions while raising revenue under the tax system. Therefore, the Government is proposing two options to promote independence:

  1. Establish an independent panel of experts who provide advice on objections raised by charities to ATO assessments on the determination of charitable status; or
  2. Form a separate area within the ATO responsible for determining outcomes for charities which object to determinations of charitable status and related tax concessions by the ATO.

It is proposed that if there continues to be a dispute after determination, there will be a right to appeal to the Administrative Appeals Tribunal.

Compliance framework

The increased powers of the ACNC to collect information for monitoring and compliance functions in respect of small unincorporated charities will be abolished. It is proposed that the Australian Securities and Investments Commission (ASIC), the ATO and State and Commonwealth Government will rely on their existing powers to provide an appropriate compliance framework.  

In addition, the states and territories have laws in place to prevent misuse of public funds and any fraudulent activity of charities.

Transitioning into the proposed arrangements

While the proposed repeal of the ACNC has caused uncertainty for the charities sector, the ACNC will continue to regulate this sector until future arrangements are determined. This means that all registered charities are still required to submit an annual statement and any new registration must be made to the ACNC. The proposed replacement arrangements are expected to be introduced into Parliament later this year.

Download a pdf version of this article: Options Paper - Australia’s Charities and Not-for-profits

Contact us for further information or you would like to make a submission.

Meagan O'Connor
Sladen Legal
+61 3 9611 0106

Luke Duggan
Sladen Legal
+61 3 9611 0176