The decision to set up a charity can be extremely rewarding, and running a charity is a great way of giving back to your community by supporting a cause close to your heart. But to ensure your charity operates efficiently, you need to become registered with the Australian Charities and Not-For-Profits Commission (ACNC), which can be a complicated process.
This article explains the steps you should take to set up your charity and become registered with the ACNC.
What is the ACNC?
The ACNC is Australia’s national regulator for charitable and not-for-profit organisations. They govern who can be a registered charity, how to maintain charity status, and fundraising activities.
Although you can certainly work to raise funds or support for a cause without being a registered charity, there are many benefits of registration. For example, registered charities can apply for a range of tax benefits, including:
- Charity tax concessions (including for income tax and GST)
- Deductible Gift Recipient (DGR) status, meaning your benefactors can make tax deductible donations
- Additional benefits as a public benevolent institution (PBI), health promotion charity (HPC) or charity for the advancement of religion
There are also several other benefits of registeration, including:
- Streamlined reporting, to the ACNC instead of ASIC, and regulatory ‘red-tape’ reduction
- The possibility of receiving Commonwealth grants
- Enhanced trustworthiness as you are permitted advertise that you are a registered charity, and display the ‘Tick of Charity Registration’ on your documents
- Having a free online presence on the ACNC charity register
Is my organisation eligible for charity registration?
Once you have decided that registration with the ACNC is right for you, it is important to confirm that your organisation is eligible.
Step 1: Is your organisation a Not-For-Profit
First, your organisation needs to be a not-for-profit (NFP). This means that the organisation is not run for the profit or benefit of the people who run it, their friends or family, or its members. To show the ACNC that they do not operate for profit, most NFPs will have a not-for-profit clause in a governing document, such as a company constitution, and following that clause. Even if your organisation makes a profit, it can still be an NFP as long as any profits go back into the organisation for the charitable purposes. To clarify, your NFP can also provide a benefit to members so long as they are genuinely carrying out the charitable purpose. This includes, for example, paying an employee of the organisation a fair wage for their work.
Step 2: Your Charitable Purpose
Second, your NFP must have a charitable purpose. Your charitable purpose can also be called your mission, or objects. There are many purposes which are considered charitable, and your organisation can have more than one. However to be eligible for registration, all of your NFPs purposes must be charitable (other than ancillary purposes, such as generating sales revenue to support your cause). The ACNC recognises the following 12 charitable purposes:
- advancing health
- advancing education
- advancing social or public welfare
- advancing religion
- advancing culture
- promoting reconciliation, mutual respect and tolerance between groups of individuals that are in Australia
- promoting or protecting human rights
- advancing the security or safety of Australia or the Australian public
- preventing or relieving the suffering of animals
- advancing the natural environment
- promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a state, a territory or another country, (where that change furthers or opposes one or more of the purposes above) and
- other similar purposes ‘beneficial to the general public’ (a general category).
Step 3: Public Benefit
Third, your NFP must benefit the public. This means it must be for the benefit of the public generally, or for a particular community. You can restrict who your charity’s benefits, but this should be consistent with your charitable purpose. Some of the charitable purposes are presumed to be for the public benefit, including advancing education, or relieving poverty, whereas others you may need to justify this to the ACNC.
Step 4: Other Rules for Charity Registration
Fourth, your NFP must meet some other general rules. Some entities cannot register as charities, for example, individuals, political parties, and criminal or terrorist organisations. Your NFP must also have an ABN and comply with ACNC governance standards to become registered.
Charity Registration Application Process
Once you have determined that your organisation is eligible to register as a charity, your next step is to complete the ACNC’s application process. To apply, you must sign up to the ACNC Charity Portal and complete their online charity registration application. This includes confirming contact information, and the eligibility information outlined above. There is no fee to apply.
To sum up
Setting up a registered charity with the ACNC is the best way to maximise the benefits available to your charitable organisation. Registration can give your charity a range of tax and other practical benefits. Before applying to the ACNC, you should ensure you meet the eligibility requirements.