Navigating Compliance for Not-for-Profits: A Practical Guide

However, an often-unexpected reality of registering a NFP is the extensive, complex, and ever-evolving compliance landscape that follows.

From financial reporting to regulatory filings, NFPs face a range of obligations that demand careful attention. This guide provides an overview of the core compliance areas that NFPs need to navigate, to continue making an impact in their communities.

This guide is not exhaustive, and we always recommend that organisations seek professional governance support to create tailored, fit-for-purpose compliance schedules. A customised approach ensures that each organisation’s governance practices are structured effectively for the year ahead, aligning with unique operational needs.

Annual Information Statement (AIS) Submissions

One of the primary requirements for registered NFPs, is the submission of an Annual Information Statement (AIS) to the Australian Charities and Not-for-profits Commission (ACNC). This annual report provides insight into a charity’s activities, finances, and achievements over the past year, ensuring transparency and accountability to donors and the public. Timely and accurate AIS submissions are critical; missing these deadlines can result in penalties or, in severe cases, loss of ACNC registration.

The AIS is due within six months after the end of an organisation's reporting period. For most organisations, the reporting period aligns with the financial year (ending 30 June), making the usual due date 31 December. However, for charities that report to a standard 30 June financial year, the Commissioner has extended the deadline for the 2024 AIS to 31 January 2025.

Fundraising Licences

Fundraising is another area of strict regulatory oversight, with licences required for NFPs conducting public fundraising in each state and territory, where they operate. These licences come with specific obligations, including reporting, renewal conditions, and transparency requirements. Since rules vary by jurisdiction, organisations must carefully track requirements to maintain compliance across all regions. Given the intricate nature of these obligations, it’s easy for organisations to inadvertently fall out of compliance.

This area of compliance is currently under review, and we are advocating for regulatory cohesion across state bodies. In the meantime, creating a detailed table of your licences and obligations is a helpful way to stay on top of this complex area.

Obtaining and Maintaining Tax Concessions

To support their work, many NFPs seek tax concessions such as GST concessions, income tax exemptions, and Fringe Benefits Tax (FBT) rebates, or exemptions. Eligibility for these tax benefits depends on meeting specific criteria, which organisations must review periodically to ensure continued compliance.

Additionally, organisations with Deductible Gift Recipient (DGR) status, which allows them to receive tax-deductible donations, must follow strict rules around the use of donations. If donations are not applied in alignment with the approved charitable purpose, the organisation’s DGR status may be at risk.

For a comprehensive review of tax and compliance requirements, we also note, NFPs registered for Goods and Services Tax (GST) must regularly lodge Business Activity Statements (BAS) to report on their GST obligations. Instalment Activity Statements (IAS) are often required for Pay-As-You-Go (PAYG) instalments. Both BAS and IAS reporting require precise record-keeping, as any oversight can result in penalties from the Australian Taxation Office (ATO). This ongoing reporting process demands a robust administrative system, as missing details can quickly lead to compliance challenges.

Maintaining ASIC or State-Based Registers

For organisations registered with ASIC or under state-based legislation, any change to registration details—such as updates to director information, addresses, or the constitution—must be reported within set timeframes. This includes notifying ASIC, or relevant state authorities, to ensure that public records accurately reflect the organisation’s current structure and governance.

NFPs also face specific governance requirements, from maintaining member records to holding Annual General Meetings (AGMs). AGMs allow members to review financial performance, discuss major initiatives, and make important governance decisions. Notification, quorum, and voting requirements vary by organisation and are typically outlined in an organisation’s constitution. Following these processes ensures that AGMs fulfil both regulatory and member expectations.

Director Responsibilities with ACNC and Regulatory Bodies

Directors must meet governance and reporting responsibilities mandated by ASIC, the ACNC, and other regulatory bodies. Directors are legally required to act in the best interests of the organisation, fulfil statutory reporting duties, and avoid conflicts of interest. Non-compliance can expose directors to personal liability, underscoring the importance of comprehensive governance training.

Policy and Register Maintenance

Maintaining up-to-date policies, such as those governing conflicts of interest and related-party transactions, is another essential compliance task. NFPs must maintain current registers of members, directors, and conflicts of interest to foster transparency, and good governance practices. Regularly updating these policies is crucial, especially as legal standards evolve, and organisational changes occur. Effective compliance depends on the ability to adapt promptly to these changes, minimising risk to the organisation.

Obtaining and Holding Fit-for-Purpose Insurance Coverage

Insurance is a key component of risk management for NFPs. Obtaining and holding the right type of insurance—such as public liability, professional indemnity, and volunteer insurance—is essential for protecting the organisation, its directors, and its beneficiaries. The types of coverage needed vary depending on the organisation’s activities, size, and risk profile. Regularly reviewing cover to ensure it is up-to-date and aligned with the organisation’s operations is vital to reduce potential liabilities and meet compliance with insurance requirements from funders, regulators, or stakeholders.

How We Can Assist

At The Breakthrough Office, our Corporate Secretarial Services and Governance Support Services are designed to alleviate the burden of these complex requirements. From AIS submissions and policy updates, to maintaining accurate registers, facilitating board governance, and managing insurance reviews, we assist NFPs in staying compliant so they can focus on advancing their mission, within their communities, with confidence. Put simply, we believe by achieving “breakthrough” in their governance, our clients will be better placed to focus their time, energy, and skills on their for-purpose functions.