Current developments in the charities and not-for-profits sector

Written by Bridgid Cowling

Bridgid Cowling is a Senior Associate at Arnold Bloch Leibler in the firm’s public interest law and native title groups. 

She advises a broad range of clients with a focus on charities and not-for-profit organisations, Aboriginal Land Councils and Native Title Representative Bodies 

She is also the Chair of The Tax Institute’s National Not-For-Profit Technical Committee. 

Players in the charities and not-for-profits sector have been kept on their collective toes over the past six to 12 months. 

The review of the Australian Charities and Not-for-profits Act 2013 (Cth), the introduction of modern slavery legislation, expansion of the whistleblower protections in the Corporations Act 2001 (Cth), the suite of foreign influence legislation including amendment to the Electoral Funding Act 1918 (Cth) and the ongoing review of the deductible gift recipient framework, have kept us all busy. 

Having incorporated these changes into our organisations and our practice there is no time to sit back and await the Government’s response to the 'Strengthening for Purpose: Australian Charities and Not-for-profits Commission Legislative Review 2018' report. 

In this column, I have chosen to highlight three current developments that should be top of mind for charities and not-for-profits and their advisers. 

As I write (16 July 2019), we are expecting the finalisation of the ATO’s ruling on the 'in Australia' requirement for certain deductible gift recipients and income tax exempt entities. This will hopefully bring an end to the uncertainty that prevailed for the years leading up to publication of the TR 2018/D1 in July last year. 

The finalisation of the ATO’s position that a public benevolent institution does not have to pursue its purposes in Australia, published in mid-March 2017, was a great move forward for the charities sector. This was especially so given the 2012 Bill, never enacted, to provide for the opposite. 

TR 2018/D1 confirmed, among other things, that ‘in Australia’ does not require the pursuit of purposes in Australia. It was generally welcomed by the sector. 

As The Tax Institute submitted in 2018, there were some examples that were unclear in the draft ruling and some terms that could have been defined more clearly and consistently. I hope that the final ruling incorporates the submissions The Tax Institute made. We may even know whether that is the case before this email hits your inbox. 

The commencement of the External Conduct Standards for registered charities is also imminent. Exactly when the disallowance period for these regulations will end is a question that has vexed us all, but there is general consensus that it will be in late July. 

Notwithstanding the plain language guidance that the Australian Charities and Not-for-profits Commission (ACNC) has published, I anticipate charities operating overseas, particularly those who are not already voluntarily compliant with the ACFID code of conduct, will have to put significant effort into understanding and ensuring compliance with these standards. 

The third current development to highlight is the Australian National Audit Office (ANAO) audit to assess the effectiveness of the ACNC’s regulation of charities. 

This is an opportunity to provide feedback on aspects of the ACNC that were not relevant to the legislation review. The ANAO is seeking submissions until 25 August 2019. The Tax Institute’s Not-For-Profit Committee will consider making submissions to this audit and welcomes input from members. Please email the Tax Policy inbox with your comments. 

Members, we welcome your thoughts via the Taxvine Feedback inbox. 

Kind regards, 
Bridgid Cowling


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