Running a Charity in Australia: Key Requirements

Running a Charity in Australia: Key Requirements

Operating a charity in Australia involves meeting a range of regulatory and compliance obligations. Here’s an overview of the key requirements to ensure your charity operates smoothly and effectively:

1. Register with the ACNC

• Register your charity with the Australian Charities and Not-for-profits Commission (ACNC) to gain recognition as a legitimate charity.
• Ensure your organization has a charitable purpose and operates for public benefit.

2. Choose a Legal Structure

• Select an appropriate legal structure for your charity, such as:
  • Incorporated Association
  • Company Limited by Guarantee
  • Trust
• The structure you choose will affect your charity’s governance, tax obligations, and reporting requirements.

3. Meet Governance Standards

• Develop a governing document (e.g., a constitution or trust deed).
• Comply with the ACNC’s Governance Standards, which include:
  • Acting lawfully
  • Ensuring accountability to members
  • Managing risks appropriately

4. Tax Benefits and Obligations

• Apply for tax concessions with the Australian Taxation Office (ATO), such as:
  • Income tax exemptions
  • GST concessions
  • Fringe benefits tax (FBT) rebates
• If eligible, register for Deductible Gift Recipient (DGR) status to allow donors to claim tax deductions.

5. Financial Reporting

• Submit an Annual Information Statement (AIS) and, if required, financial reports to the ACNC.
• Reporting requirements vary based on your charity’s size:
  • Small charities (annual revenue under $500,000): AIS only
  • Medium charities (revenue $500,000–$3 million): AIS + reviewed financial reports
  • Large charities (revenue over $3 million): AIS + audited financial reports

6. Manage Employees and Volunteers

• Fulfill legal obligations for employees, including:
  • Paying wages
  • Providing superannuation
  • Complying with workplace laws
• Ensure volunteers are appropriately onboarded and managed, and consider obtaining volunteer insurance.

7. Obtain Insurance

• Protect your charity with the appropriate insurance coverage, such as:
  • Public liability insurance
  • Volunteer insurance
  • Directors’ and officers’ insurance

8. Compliance and Fundraising

• Adhere to state-specific fundraising laws and obtain the necessary licenses if required.
• Notify the ACNC of significant changes to your charity, such as:
  • Changes to governing documents
  • Changes to responsible persons (e.g., directors or trustees)
• Maintain compliance with ongoing reporting obligations.

9. Focus on Purpose

• Regularly evaluate your charity’s activities to ensure they align with your charitable mission and deliver community benefit.

Final Thoughts

Running a charity in Australia comes with many responsibilities, but meeting these requirements ensures your charity’s success and credibility. If in doubt, seek advice from a qualified tax agent or legal professional to help you navigate the complexities of operating a charity.