Matt Crichton:

Hello and welcome to today’s Webinar, which as you can see on the screen, is about how to start a charity. My name is Matt Crichton and joining me to present today’s Webinar for you is my colleague Chris Riches. Hi Chris.

Chris Riches:

Hello.

Matt:

We’re both from the ACNCs education team. And we’re going to take you through this topic today. But before we do get to the topic itself, just a couple of I suppose administrative tasks to get through. First, if you’re having any trouble with the audio at any point, you can dial into listen to the Webinar via your phone. You should have received a confirmation email when you signed up and that would have had a telephone number that you can call to be able to listen into the Webinar. But let’s hope your internet connections are all fine and you won’t need this, but it is a backup option. If you want to ask any questions as we go along, feel free to do so, you can use the go-to Webinar navigation panel there to ask some questions. We have our colleague Breanna ready to answer all your questions. So shoot them through as they come up. But if you’d rather watch the presentation itself and ask a question later, you can do that, too, because we will reserve some time for a bit of a Q and A at the end of the main presentation. We try our best to get to all your questions, but if there are a lot or if the answers demand a more complex answer I suppose we may get back to you via email at a later point. But rest assured, we will respond to you in some way.

And we are recording this Webinar. So if you do miss out on bits or you have to leave halfway through, don’t worry. There will be a recording of it published on our website in the next day or so. And we will send a follow-up email to all who registered, which will have a link to the recorded Webinar, as well as a bunch of resources. All the resources that we refer to in the Webinar will be included in that follow-up email. So look out for that in the next day or two. And just before we do get into the main topic, the other thing is that we really do appreciate your feedback on these sorts of things. So if you can spare the time, there’s a very short survey at the very end, which goes… I think it asks three questions and takes about 15 seconds to complete. If you take the time to do that, we’d really appreciate it. We do get a lot out of the feedback survey at the end.

OK. Onto the presentation itself. Today, we’re going to cover these I suppose main sections. First, we’ll have a look at what makes a charity a charity and the eligibility criteria for registration with the ACNC. We’ll have a look at whether or not starting a charity is the best thing to do to support a cause that you’re interested in. This, I suppose, is an important consideration that is quite often overlooked. And we will spend a little bit of time covering it today. It’s worth turning your attention to. We’ll have a look at the registration process and give you an idea of the things you need to have ready if you are to apply to register a charity. And then we’ll take a quick look at charity tax concessions, including the all-important endorsement that allows you to offer tax deductible donations. And just finally, we’ll remind you of a few of the main obligations of a registered charity.

OK. So let’s get started. I think it’s worth clarifying the distinction between charities and not-for-profits at the outset, because there may be a little bit of confusion with these terms. Chris, can you help us out here? What is a not-for-profit?

Chris:

You’re right, Matt. There is a real (?) distinction, difference, between the two terms. A not-for-profit basically is an organisation that does not operate for the profit or the personal gain or other benefit of the people who run it, or those people’s friends or relatives, or for the members of the organisation. The money and the resources it has, they have to be put back into the organisation and they have to be used for its aims, its mission objectives, that type of thing.

Matt:

OK. So for example, where a private company would make money and distribute profits to its shareholders or its owners or others, a not-for-profit can’t do that. And if a not-for-profit makes money in some way, that money must be put back into the organisation?

Chris:

Yeah, yeah. Definitely. Yeah. As the name suggests, it’s not for the profit of the people who are involved. Now, we here at the ACNC like to emphasise that just because an organisation is a not-for-profit, it doesn’t mean we can’t make a profit. Now this is pretty important to remember. In many ways, making a profit is actually desirable. The important thing to remember is that the use of the money and the other resources, it must be used for your group’s purposes. And it’s important to remember that this use of funds includes staff salaries and other reasonable expenses. Your organisation’s governing document, that’s its constitution or its rules, that may include some clauses about these types of reasonable payments and benefits.

Matt:

Yeah. I suppose that’s a good point about staff, too. Many not-for-profits have staff that do the work of the organisation. And it’s reasonable that they’re paid for their work. Now how is a not-for-profit different to a charity?

Chris:

Well, a charity is a not-for-profit and has a charitable purpose, that’s probably the simplest way of putting it. Charities are I guess a subset of not-for-profits. But we’ll get back to charitable purpose in a little bit more detail in a second.

Matt:

OK. Well, just on the not-for-profit thing then, how can an organisation show or I suppose prove that it is in fact not-for-profit?

Chris:

Look, there’s certain clauses that they can include in their constitution or in their rules. That’s, you know, the governing document that sets out how the organisation is run.

Matt:

OK. So the proof, if you like, and I suppose the reason we refer to it, is this is the… it’s often asked of us, how can an organisation prove or how does it register to be not-for-profit. So that comes in it being written into the rules of the organisation. So the rules of the organisation then dictate that the way it manages its money and its resources will be done in a not-for-profit manner?

Chris:

Yeah, definitely. And the way this is done is two I guess key clauses in the constitution or the rules for this purpose. And we can look at them one at a time. As you can see up there, the first one is the not-for-profit clause. Now that clause outlines how an organisation’s assets and income are to be used and distributed.

Matt:

And this, again, presumably will prohibit the use of funds and other resources for personal gain. So it will set a rule that funds and other resources can only be used for the organisation’s purposes.

Chris:

Yeah. I mean, yeah, the specific wording of this clause, it might differ between organisations, but yeah, that’s the sentiment, that’s the aim. Many of the model rules, the incorporated associations across Australia, have a variant of this clause in them. Now the second clause is the dissolution clause or the winding up clause. This one’s important because it outlines what happens to the organisation’s assets if it is wound up. Now to be a charity, this clause requires the assets go to another charity. Often this clause I guess stipulates or specifies that it is a charity with a similar purpose. So this means that the organisation’s money is still being used for a charitable purpose even after the organisation itself has finished up.

Matt:

Right. So I suppose it’s requirement to demonstrate the not-for-profit nature of an organisation extends right through the whole lifecycle of the organisation right through to its winding up so that the people involved aren’t in receive of any private benefit in the case of the organisation closes up. And for whatever reason, it might be that it’s finished what it needs to do or it’s not longer sustainable. But in the process of winding up there isn’t any private benefit conferred upon the people involved.

Chris:

Absolutely.

Matt:

OK. Now let’s get onto charities. So that gives us a basic outline or an overview of what a not-for-profit is, so how does this then differ to a charity?

Chris:

Well, we mentioned earlier that a charity is a subset or charities are a subset of not-for-profits. Not all not-for-profits are charities but every charity is a not-for-profit. First thing that a charity has to be is it has to be not-for-profit. The next thing a charity must have, and this is where it differs to a regular, garden-variety not-for-profit, is a charitable purpose. Now an organisation’s purpose is the thing that it’s set up to achieve. You know, it might be its aims, its mission, that type of stuff. The reason that it exists, pretty much. If an organisation wants to be a charity, its purpose must be charitable. Now here in Australia there are 12 charitable purposes listed in law. The Charities Act lists them and they cover a wide-range of objectives. For example, advancing education, advancing health, advancing social or public welfare. That’s just a few of the common ones. You can see them all on the link on the website. Not the one, the bottom of the screen there, but a different one: acnc.gov.au/charitablepurpose.

So I guess to put it simply, the best way to think about the difference between a not-for-profit and a charity is to think of a charity as a not-for-profit with charitable purposes.

Matt:

OK. So a charity, being a not-for-profit, has a charitable purpose, means I suppose the local cricket club or football club may well be a not-for-profit in that they operate in a not-for-profit manner, but they’re unlikely to be charities because they don’t have charitable purposes, cricket and football aren’t charitable purposes. And similarly, something like a local environmental group, although not commonly thought of as a charity, more often thought to be just a straight not-for-profit, that’s likely to be a charity. It operates in a not-for-profit way and has the charitable purpose of advancing the natural environment.

Chris:

Yeah. All of this… there’s lots of organisations that may fit into that, sort of that wider category. There’s a lot of schools, there’s universities, hospitals, aged care facilities. They’re all registered as charities for the same reason. They are not-for-profit in nature and they have charitable purposes. But there is an important point here, to be registered as a charity, the organisation must have solely charitable purposes. It can’t have a charitable purpose in amongst a bunch of other non-charitable purposes and bits and pieces. The charity as a whole must be charitable.

Matt:

OK. That’s a really important point. It means that an organisation can’t just be set up for something that’s not charitable and then just on the side tack on a charitable thing to make it a charity. They whole organisation has to be a charity.

Chris:

Yeah.

Matt:

And I suppose before we move on, it is worth reminding people that the ACNC only registers charities, not non-charitable not-for-profits. That is to say sort of your straight not-for-profit that couldn’t be registered as a charity. So although the name of our department has not-for-profit in it, it’s the Australian Charities Not-for-profits Commission, we do only register charities, the not-for-profits that can be registered as charities. OK. Before we move into some of the other topics we were going to cover today, there are just a few other things that an organisation needs to know before it is eligible to register as a charity. Can you just take us through those ones, Chris?

Chris:

Yeah. There’s a flipside. We’ve talked about charitable purpose. There’s a bit of a different side of the coin, and that is to not have any disqualifying purposes. Now there are a few things that are considered to be disqualifying purposes and features. This means that if an organisation has any of these purposes, it will not be eligible to register as a charity with the ACNC. Now the first one is that your organisation, it can’t be an individual, which is probably pretty self-explanatory. It can’t be a political party and it can’t be a government entity, as we call them. The second one is the organisation can’t have the purpose of, and this is how we state it, engaging in or promoting activities that are unlawful or against public policy. And it also, it can’t have the purpose of promoting or opposing a political party or a candidate for political office.

Matt:

OK. So well we probably don’t have quite the time to get into these in real depth here. But… so I suppose the first two points there on the screen, and we took them in the opposite order. So it can’t be an individual or political party or government entity. And then you can’t have a disqualifying purpose, those two being the ones you just mentioned. So not having the purpose of engaging in or promoting activities that are unlawful or against public policy, being one of them, and the other disqualifying purpose, the purpose of promoting or opposing a political party or candidate for political office. OK. That does set some boundaries I suppose to help shape people’s thinking about being eligible to register as a charity. And we will include a couple of links that will explain this in more details in the follow up email, if you wanted to read a little bit more about it. But there are a few other things, as the screen suggests, that an organisation needs to know, what are those?

Chris:

It needs to have an ABN. So that’s an Australian Business Number.

Matt:

OK. Just on that, can the ABN be one that you use for business or maybe as a sole trader? So could you effectively borrow your existing ABN for the organisation for the purpose of registering them as a charity?

Chris:

No. No borrowing or repurposing allowed on this one. Any organisation that wants to go along the lines of registering as a charity, it will need its own ABN. And it needs to be set up with an ABN that matches its legal structure. So if an organisation is set up as a company limited by guarantee it will need to have an ABN that reflects this. Same thing for an incorporated association or any other organisation structures. So that’s important. You can’t repurpose or borrow an ABN that you’ve got for other purposes. You’ve got to have your own. And as it says up on the screen there, and we might touch on this again a little bit later, one of the other steps is to comply with the ACNC governance standards. But we’ll get back to them in a second.

Matt:

OK. Now I did mention at the beginning this idea of whether or not someone should start a charity. With the eligibility criteria now out the way, let’s take a little bit of time to just explore this. I think it is an interesting and important question because it’s often overlooked in I suppose the excitement to start up something new, start up a new charity for something someone feels passionate about. But it is one that is worthy of some attention. So Chris I’ll get you to take us through this a little bit. What are we getting at when we question whether someone should start a charity?

Chris:

What I guess we’re thinking about here is the question of how best to achieve the aims that you wish to achieve. It’s not to discourage or make the idea of starting a charity seem to be unwise. It’s just simply asking people to think about the things they want to achieve and then how they can achieve them in the best way. It might mean that, you know, starting a new charity isn’t the best way to achieve what you want to do. And this could be for a number of reasons. There might already be a charity doing something similar in your area. Just set up time and cost, you know, might be prohibiting, might be beyond what you’re capable of. There might be a few too many regulatory hurdles in the way. This of course will depend on what you want to do and where you live and the services that are already available. But there are other, or there may be other ways that you can help without needing to start a brand-new charity. So I guess here at the ACNC we urge everyone before they go through the processes to start a charity to really take some time, to have a look around, have a look around the sector, and do so critically. You know, scrutinise it. Just because you can start a charity and that you’re capable and actually able to start one, it doesn’t mean that you should actually do so.

Matt:

OK. Well, that’s an important point. This isn’t necessarily to discourage people. It really is just about efficiency and effectiveness. So for example, while we encourage, and even celebrate I suppose, someone’s desire to help, if their local area already has three charities doing similar work to what they want to do, is there really a need for a fourth? I think that’s the question we’re getting at.

Chris:

Yeah. That’s right. You know, we, the ACNC, obviously supports, you know, a diverse and a robust and effective sector. You’ve probably heard us say it on a number of occasions. In thinking about whether to start a charity or not, you should think about a number of I guess aspects. The first one is the duplication of efforts. We’ve been obviously touching on this just now. Yeah, does a charity already exist to do the work that you’re already looking at doing? Now of course, there are plenty of charities out there that share the same space in a broad sense, but is there a charity that very specifically mirrors what you intend to do?

Matt:

And I suppose if there is, it may be worth thinking about ways to help that charity achieve its goals.

Chris:

Yeah. And you know, that might be where people look to support the existing charity in another way. Maybe even just something as simple as volunteering for it, for example, or raising money for it, for example. So thinking of those different possibilities is important. Then to this duplicated efforts I guess point is the sector one here that you can see on the screen, that’s competition. You know, it would probably be fair to say that charities always sort of face a bit of a battle and a bit of a struggle to raise all of the funds that they need to do to do their work. The pot of donations and funding is limited. It’s not endless. And often it does struggle to keep pace with, you know, the growing demands on groups in the charitable sector, and on, you know, and for the growing number of charities. Logic dictates that more charities means more competition. Now that might be good for the sector in some ways, you know, it might lead to innovation, might lead to collaboration, and might lead to efficiencies. In other ways, it might not be really positive. So it could be argued, too, that to form a charity to do the same work as one that’s already existing and established is inefficient and is an inefficient way of achieving the desired outcomes.

Matt:

And I suppose this isn’t necessarily to say that you can’t start one or to dictate that people shouldn’t start one if they already see a charity doing some similar work. It’s just, again, about raising the question and encouraging people to think about what they want to achieve and, and this is the important bit, how best they can do it.

Chris:

Yeah. And you know, there are a lot of charities that on the surface if you look at them, they do what seems to be similar work. But there might be important differences. You know, if we say talk about the number of charities and we know that there are a lot of them that are dedicated to supporting people with cancer, for example. Now the distinction here might be that one charity helps a certain group of people and the other might help only you know youngsters, only kids. One might support those with a certain type of cancer, another group might or another charity might actually raise funds towards research. So you know, instead of providing I guess the direct care. So there are those shades and distinctions in everything. Really the key things here are efficiency and effectiveness. People should remember that starting and running a new charity is hard work. Raising funds is difficult. It can be a challenge. It’s important to keep these things in mind when you’re considering going through the processes of starting a charity. And as we mentioned before, there’s a range of things that people can do that might not involved starting a charity but might involve supporting one that already exists. Raising money in the name of say a loved one and giving it, donating it across to the charity. You know, volunteering, special trusts, that type of thing. They’re all options.

Matt:

But if someone has decided that they do actually want to go ahead and start their charity, which of course they can, this principle still applies, right, they don’t have to go it alone in competition with others?

Chris:

Yeah. That’s right. And as you can see here up on the screen, we’ve got the third bullet point there, which is sharing or collaborating. Now if you have started a charity, this is important to keep in mind. There’s been a number of studies in recent times and it found more and more charities have at least, you know, thought about or considered sharing resources, collaborating with other charities, on projects and programmes. A growing number are actually doing so with some of these services. So it’s worth asking yourselves whether your organisation could take up one of these arrangements. And charities should regularly assess their efficiency and effectiveness. And in doing so that might mean that they can look at collaborating on projects or even merging with other charities to achieve better outcomes. Now it’s important to note of course that these types of decisions should only be made by the charities themselves rather than being dictated by ourselves as the regulator.

Matt:

And I suppose what are the best ways that someone can find other charities or at least maybe see what services are available in their area?

Chris:

Yeah, look there’s a couple of points or a couple of pretty good sources of info. Charities Report. The ACNC Charities Report is a good one. That report gives a really great overview of the sector, you know, overall. But the data that formed the basis of this report, it’s freely available to explore and you can really drill down into the stats and go into the details about the charities that are operating perhaps in your geographical area or also in your field of interest. Another I guess important tool is the Charity Register. That’s available at acnc.gov.au/charityregister. That’s another great reference point for finding registered charities in an area. And you know, the old Google search on desktop. Google search is always a good way to find out a bit more as well.

Matt:

OK. Well, having had a look at the eligibility, particularly about not-for-profit and charity distinction, I mean you know, this idea of whether or not starting a charity is actually the best thing to do, we’ll now just take a look at some of the other important considerations if you are on the cusp of starting something new. There are some things to consider properly before you get to the point of feeling out the registration form. So Chris, what should a person take the time to consider at this point?

Chris:

There are a few, there are a few considerations. The first one should be to look at the fundraising that you might have to do. We touched on this before. How much money you’re going to actually need? You know, what is, what is the expected amount you think you’ll need to be sustainable, to cover expenses, all of those sorts of things.

Matt:

Before we do get into fundraising though, there are probably a few other… we’ll touch on fundraising a little bit in a moment. The background research I think is one point that we would really encourage people… although we’ve spoken a fair bit about this so far, the background research is one point that people really should take seriously if they’re to register a charity that is effective and also, importantly, sustainable.

Chris:

Have a look and have a think about what you want to achieve. You know, you’re setting up the charity the best way to achieve the goals that you might have. Again, there might be an existing charity, a not-for-profit that already does what you do. Or even might take on an idea that you have as a project that it can support. So again, search the Charity Register, look at the Charities Report data. Make sure that you’re confident that there is a need for the thing that you want your charity to do. The next step, once you’ve done that, got a bit of background research, is to be very clear, outline your purpose. You know, ensure that you’re clear on what your charity will set out to do, the timelines, other details. It might help you to write this sort of stuff down, to have it actually spelt out and to go through the process of spelling it out for yourself in a way. Ask yourselves, what will the charity be trying to achieve, what its main activities will be, its programmes or services. Who’s going to benefit from its activities and programmes? Even ask why there’s a need for this new charity. And as a last point and one that’s often overlooked, think about how long the charity is going to last. It might be, you know, a limited life charity. It might be short-term, one-off project type of charity. Or it might be an ongoing, sort of long-term venture.

Matt:

Yeah. And I suppose it’s clearly, it’s important to be clear about the purposes of the charity. But these should be included in the organisation’s constitution or its rules or that governing document that sets it up. And importantly, not only will it show people, including the ACNCs, what the charitable purposes are, providing it in or having it in the constitution will provide a guide that keeps you and the people involved in your charity on track and working for the things that it should be. Now just onto the resources needed because finance is something that’s often overlooked but it’s a really important thing.

Chris:

Yeah, and as I started mentioning before, the idea that people have a great idea, they want to do something, but they perhaps don’t think about the boring practicalities of these types of things. And yeah, they need to think about what it’s going to actually take to run a charity. And we sort of think of funds and money. But you know, we might be looking at resources, equipment, volunteers, whatever else. You know, the outline and the cost of establishment. You know, think about the fundraising you need to do, you know what you’re going to need to be sustainable, all those sorts of things. And then have a think about also the licenses or the permits that you’ll need to gather up and get for your fundraising. You’re going to be likely to need to register with a number of state bodies if you want to raise money in several states or your own state body. So you need to be familiar with the requirements there. Now at this point we’ll always jump in and say the ACNC doesn’t regulate fundraising, this is done on a state level. We do have plenty of resources to help you understand where you need to go and they’re available on our website.

Matt:

That’s a good point to remember, I suppose. Many people do, understandably I guess, get swept away in the idea and the desire to get something set up to help people. But maybe neglect to consider the ins and outs of resources and fundraising. And although a charity is quite different to a business in many ways, obviously, it can help to think about things with I suppose a business mindset, just to make sure that you’re prepared for the financial realities.

Chris:

Yeah. And I mean we sort of talked about that business mindset when we looked at the funding and fundraising and permits and all of that sort of stuff. I guess another thing to look at in a bit of a business mindset, too, is the legal structure and what legal structure that your charity is going to take. When you’re thinking about this it’s important to think about what’s suitable for your charity right now but then something that will meet it’s needs into the future. So you know, will you form a company, will you form an incorporated association, is it something unincorporated? So you know, again, we go back to the point of doing some research and spending some time learning a bit about the various structures that charities can take up. The most common ones are incorporated associations and companies that are limited by guarantee.

Matt:

And we have, have some good resources on legal structure that we’ll include in the follow-up email. And just this last point now, how will your charity be managed. This is another important consideration.

Chris:

Yeah. And it harks back a little bit to the legal structure, too. Because it might effect the legal structure that you choose for your charity. But it will also help you focus on the resources you need. So again, there’s probably a few questions you should think about. The first is, what kind of governing body, that’s, you know, the board or the committee, do you need or want? What type of governance, you know your rules or practices, will the charity have? What kind of formal processes will you have for things like, you know, meetings, making rules, changing rules, making decisions, those sorts of things? And the last point or final point is, have a think about where the charity will operate from. Is it going to have a dedicated, you know, a bricks and mortar shopfront? Is it going to be operated from a home office? Is it going to be online? Is it going to be in a shared space with another organisation? So in those things, governance for good publication, the ACNCs governance for good publication, that’s a pretty good reference point for all things governance.

Matt:

OK. And like this point, I suppose someone who has done everything we’ve said like a diligent student will be at the point of registering. So how about the practicalities of registering a charity? How do people do it?

Chris:

Alright. The first thing you need to do is you need to make sure you’ve got everything on hand to complete the registration form that you’ll need to fill in through the ACNC. Again, we’ve got a handy little registration checklist with a link there up on the screen. There are a few things that you’ll need to provide. Names, dates, and other details. Now that includes the ABN as well, legal structures and governing document, what you’ll be doing, the activities, who you’ll be helping, which are who we call beneficiaries, what the overall aims are, your purposes, and from that you draw your subtypes, the details of your responsible persons, the relevant financial information that is required, and, you know, information about things like tax concession, DGR, and any other requests that you might have. So again, go and have a look at that checklist on the website, there’s a really good sort of rundown there of what you’ll need.

Matt:

And of course, if you’re heavily involved in the setup of an organisation, you’re likely to know this stuff and have it at hand anyway when you’re filling in the registration application.

Chris:

Yeah. And the registration application, too, it’s an online form. So you can access it pretty easily. You go through the charity portal. It’s charity.acnc.gov.au. You just need to login to do so. If you haven’t had to login before you’ll need to create a new user account. Just follow the prompts from the charity portal page.

Matt:

As the instruction on the slide shows us now.

Chris:

Yeah.

Matt:

And before we finish up and get to our Q and A section, I think it’s worth touching on tax concessions that a charity’s entitled to. We often get asked about this and it is an important consideration for charities. So we’ll go over it very briefly. First, Chris, what tax concessions are available to registered charities?

Chris:

There are a few. It’s important here to note that, you know, the ACNC doesn’t administer tax concessions. The ACNC registers charities. This registration is a prerequisite for certain tax concessions. But it’s our friends at the ATO that administer tax concessions and endorses charities for those concessions. So look, any questions, I guess specific questions, about this, the ATO are probably the best people to talk to. We can give you an overview though, as you can see on the screen there are a number of tax concessions available to registered charities. There’s income tax exemptions, there’s GST concession, FBT, fringe benefit tax rebates are exemption, they’re common standard concessions available to registered charities. Again, the ATO is the place to go to provide some personalised or specific information. They’ve got a dedicated not-for-profit support line and they’re very helpful. You can ring them up, they’re at 1300 130 248.

Matt:

Might have been a bit quick. 1300 130 248. We don’t have it on the screen. But again, we’ll include this information in the follow-up email for you if you didn’t want to give them a call. And tax concessions wouldn’t be complete without a bit of a discussion of deductable gift recipient, commonly referred to by its initials DGR. This is something that many charities ask about and this is the concession or the endorsement that allows charities to offer tax deductions on the donations that they receive. But not all charities have this endorsement and not all charities can offer tax deductions for donations. That’s…

Chris:

Yeah. Yeah. There’s a very common misconception that all charities have DGR endorsement. And yeah, that’s not the case. The vast majority, and I think at last look it was about two thirds of charities, they don’t have DGR endorsement. So again, similar to other tax concessions, it’s important to note that the ACNC does not make the decision on whether a charity is DGR eligible. That decision flows back through and is made by the ATO. There are lots of categories of DGR and each of them come with their own requirements. So there are some for specific types of charities and other organisations. So not every charity will be eligible. It’s worth having a look at the DGR categories on the ATO website and you’ll be able to see if your charity will be eligible. Now although the ACNC doesn’t assess or endorse the tax concessions, our registration form allows you to apply for them. So what that means is that you don’t have to apply separately for tax concessions, which is nice and handy. Once the ACNC is done with the charity application, we pass the application for DGR over to the ATO for them to assess. Again, there’s some great information on the ACNC site, that’s are acnc.gov.au/dgr. There is also great information on the ATO site via the link that is down there on the bottom of the screen.

Matt:

And finally, we mentioned earlier about the ongoing obligations of an organisation once it is registered with the ACNC as a charity. So we’ll just touch on those. What does a charity need to do once it is registered?

Chris:

There’s a few things. Again, we’ll touch on them here. But if you want to have a bit more of a detailed look that’s via acnc.gov.au/obligations. First one there on the list, a charity has to comply with the ACNCs governance standards. So there’s five of them. They’re core minimum standards that deal with how charities are run. And that includes their processes, their activities, relationships, their overall governance. So yeah, I mean there’s plenty of information on our site. If you go in and search the term governance standards you’ll find plenty there. There’s a new set of standards that are on the radar. They’ve actually just come into effect for charities that operate overseas. They’re the external conduct standards. They’re similar in a way in that they are standards of governance but these ones apply to the work that charities carry out overseas. Again, there’s a link there at the bottom of the screen for more information on those standards. Registered charities have to report to the ACNC. Often that happens through the annual information statement, that’s the major one. There is an annual… that’s the annual form that asks the charities about their activities, their finances, their people, that type of thing. They also, that’s charities, need to notify the ACNC when certain details change. And remember that your charity, most will have obligations to other regulators as well. They might be different within government departments, it might be states or territories. Again, there’s more information about them via the management charity link on the ACNC site and also up there on the screen.

Matt:

OK. That does bring us to some questions. And we’ve had a few. We’ll just I suppose deal with some of the ones that we think might of most use for everyone. Again, I think I said that at the beginning, but if you have something… actually, no, I might not have said this at the beginning. But if you have something really specific about your organisation and its details, it’s probably best to give us a call or send us an email. We’ll be able to deal with those questions in that way. At this point, being the public forum that it is, we’ll try and deal with some of the questions that will most I suppose, will help other people as well. OK. Let’s have a look at the first one. So I’m just picking up, Chris, can you give us a look, see which one?

Chris:

Yeah. OK. We’ve got one here touching on fundraising actually. How do we register for fundraising? That’s actually a pretty good question, that one.

Matt:

Yeah. It’s an interesting one. It seems to have a… you’d think it would have a simple answer, you just register with the ACNC and you’re allowed to fundraise. It’s not quite that simply. As we said during the presentation, fundraising laws are managed at the state level by the states. And they’re slightly different between states. So you’ll need to register, I suppose is the word, or maybe more accurately is apply for a license or a permit to be able to do it in the state that you want to conduct the fundraising. So it’s best to have a look at the state in which you want to conduct some fundraising in and see what is required there to be able to do it. And it might be that you need to get a license, you might need a permit, you might have some restrictions on what you can and can’t do. So I suppose the short answer is that there’s no single spot to I suppose register as a fundraiser as such, it’s more about the location in which you are fundraising and the state body that oversees fundraising and whatever rules and regulations that they have and following those.

Chris:

And there’s, again, there’s plenty of information on the ACNC website about that. Another question we’ve got is about not-for-profits and whether they get tax concessions as well.

Matt:

Yeah, that’s a good one. We did mention what tax concessions are available to charities if they register with the ACNC. Again, I’ll preface this by saying it’s best to speak to the ATO about the details of this and their not-for-profit line is a really good place to do so. But there may be some concessions or some allowances available for organisations that aren’t registered as a charity but are in fact a not for profit. I’d give the NFP line, the not-for-profits support line at the ATO a call, that’s 1300 130 248, to ask if there are any specific tax concessions that a not-for-profit’s entitled to. But the ones that we mentioned, that income tax exemption and some of the other concessions or exemptions for other particular types of tax are limited to the not-for-profits that are registered as charities with the ACNC. But again, check with the ATO, check with the ATO about the details of what’s available for not-for-profits that aren’t registered or can’t be registered.

Chris:

We’ve had another one come. We touched on it a little bit during the presentation in terms of legal structures. What legal structures are actually available for registered charities?

Matt:

This is, I suppose, a tricky question in there’s no one single answer. There are a range of structures that an organisation could take and it’s less about thinking, what’s available for a charity, as much as, what legal structure best suites the organisation that you’re going to set up? I suppose a useful answer may be to say, what are the most common? And you’ll find that many charities registered with the ACNC are set up as incorporated associations. There are quite a significant number of charities that are set up as companies limited by guarantee, public companies limited by guarantee. They would be registered with ASIC. And the incorporated associations on the other hand would be registered in a particular state and sort of overseen at the state level. A charity may take a less formal structure. It might be unincorporated. And there are pros and cons with each of these and it depends largely on what suits your organisation, the people that are involved in running it and what you see it doing in the future. So for example, an incorporated association may be an appropriate structure for an organisation that’s likely only going to operate in a local area, in one state, and is unlikely to grow or venture into other states and areas. But if you see your organisation possibly getting bigger and operating nationally and it may be let’s say a public company limited by guarantee, one registered with ASIC, is the better structure.

We’ll include some really good resources, not only the ACNC stuff, but some other resources in the follow-up email to this Webinar, which will give a more detailed look at legal structure and, importantly, the pros and cons between each. Because there are lots of pros and cons and it’s worth considering how they work for you, less so because you’re going to be a charity, more so because of the way you want to structure the work that your charity does.

Chris:

Yeah. You need to set yourself up right, I guess, or in the most appropriate way when you start. We have got one more question, he says looking at the rundown of questions. It’s an interesting one. Do I need to register as a not-for-profit?

Matt:

Yeah, I think this touches again on that confusion between not-for-profit and charity. The short answer is no, not with the ACNC at least. The ACNC only registers charities and knock-on effect of being registered as a charity is that you’re entitled to certain tax concessions with the ATO. There isn’t a single body, a federal body like the ACNC, to register as a not-for-profit. But it may be that by virtue of your structure, whether it be an incorporated association or a company limited by guarantee, you are registered with a government agency, whether it’s ASIC or at the state level, and you also operate as a not-for-profit. So it’s not that they are not-for-profit registering bodies by definition, they’re just, you’re registered with those organisations or those government departments because of the structure you take and within your constitutional rules or whatever you’ve got that’s set up the organisation, it makes it clear, it stipulates that you are a not-for-profit. And this may differ between different state departments as well.

OK. That’s… well, actually it’s worth covering one more. We’ve had another question come in about the need to register for fundraising in each state and territory. I think that might not have come across as clearly as it could have been. If you think about fundraising as something that’s governed by a department in each state and is separate from state to state and slightly different rules, slightly differently requirements in each state, as an organisation you’re likely, well you’re going to have to need to meet the requirements as set out by that department in the state. So for example, if you’re an incorporated association in Victoria and you want to do some fundraising in Victoria, you’ll need to comply with the rules and regulations of fundraising in Victoria. And that may be that you need a license and you need whatever else. You need to register with consumer affairs, you need to… you’re only restricted to certain activities or whatever it may be. But then if you, you know, want to run some fundraising in Sydney and Adelaide as well, you’re likely going to have to go to the equivalent body in New South Wales, I think it’s the Office of Fair Trading off the top of my head.

Chris:

I think it is, yes.

Matt:

And register there and do whatever you’re required to do in New South Wales. And again, that may be similar, it may be that you need a permit, a license, or whatever it may be and you may have to do certain things or report certain things based on the amounts you fundraise or whatever those rules and regulations may be. But it’s likely to be slightly different to that that you had to do in Victoria. And again, in South Australia or whatever state or territory it may be. They differ slightly between the states. So it’s worth knowing… one, I suppose knowing who the body in each state is.

Chris:

We’ve got plenty of the lists and that information on the site about that as well.

Matt:

Yeah. And knowing what those bodies require of an organisation to be able to fundraise. In most cases it’s likely to be a license. But to get that license or permit you’re going to have to do a few things, submit a form or… and do a few other things that go with it. And that will differ depending on the state. So step one, figure it out, which department is responsible for fundraising in the state that you want to do some fundraising, and then from there figure out what they require for you to be able to do the fundraising.

OK. That brings us to the end of today’s Webinar. I hope that you found it useful and I hope those questions that we were able to provide answers to helped you out and helped clarify some things. As we have said a few times though, if something pops into your head and you didn’t get around to asking it, send us an email. The best email address to do so for that is advice@acnc.gov.au. We’ll get back to you with some, with answers to your queries. Or of course, give us a call. We’ve got a dedicated support line, too, which the number for that is 1322 62. Lots of resources that we’re going to include for you in the follow-up email in the next day or two. So I know it might feel a little bit like information overload at this point, but you’ll have an email with all of these listed there and hyperlinked to the resources so you can keep that email as a sort of repository of wisdom on this topic. Stay in touch with the ACNC. We’ve got lots of things like this, video content, podcasts, Webinars. The Commissioners Column is a good way to stay in touch with all news of the ACNC. And as I said, yeah, if you’ve got any questions about your organisation or things you’d like to know about registration, send us an email, advice@acnc.gov.au. And we’re very active on social media.

We will upload this, the recording of this Webinar, to our website and to our YouTube page later on. And you’ll receive an email when that’s done so you can have it as a reference. And if you want to sign up for any more Webinars, go to our website acnc.gov.au/webinars. You can view old Webinars and sign up for any upcoming Webinars. And if you’ve got any questions, comments, or feedback about the Webinars in particular as opposed to stuff about your organisation or registration, send us an email to education@acnc.gov.au. As I said before, we love getting your feedback and it really helps us shape these things and helps us think about the sorts of topics and resources we need to provide for you.

Thank you very much for attending. And just on the feedback thing, sorry, I feel like I may sound like a broken record to you, but we have a very short, very short, I promise, survey at the end of this once you finish the Webinar. If you could take the time to just fill in those questions, that would be great, really appreciate that, too. OK. Well, that brings us to the end of today’s Webinar. Look out for the email coming out soon. Thanks very much, Chris, for all your wisdom.

Chris:

Thank you.

Matt:

And thanks to our colleague, Breanna, who has been answering all of your questions as we’ve gone along. We really appreciate you attending these Webinars and we look forward to seeing you again at the next one. Thanks everybody.

Chris:

Bye.

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