The Australian Charities and Not-for-Profits Commission (ACNC) commences operation on 1 July 2012.
There are only four months remaining before the commencement of the ACNC. Some of you may not have been keeping yourselves up to date with the developments in the establishment of the ACNC and its proposed operations and powers. If so, this bulletin will apprise you of what you really need to know about the ACNC at this point in time1.
Existing charities are those organisations, trusts etc which are currently endorsed as charities with the ATO.
What do existing charities need to do prior to 1 July 2012? The answer is nothing.
Existing charities are not required to do anything at this stage. As from 1 July 2012, the ATO will transfer all of the registrations of charities from the ATO to the ACNC. Your charity will not need to re-register with the ACNC to be a charity.
As the ATO will be transferring data on existing charities to the ACNC, in an attempt to ‘clean’ this data, the ATO will be writing to all existing charities in the coming weeks to collect up to date details concerning each charity (such as contact details).
As existing charities will not need to fill in a registration form, they will be asked to supply additional information along with their first annual information statement to the ACNC as from 1 July 2013.
Annual information statement
All charities will need to provide the ACNC with an annual information statement as from 1 July 2013. Reporting requirements will be proportional, based on the size of the charity. Only some of the information collected will be made publicly available on the ACNC’s charity portal webpage.
The annual information statement will contain both financial and non-financial (e.g. names of board members) information concerning the 2012/13 financial year. The ACNC will soon commence explaining to charities what sort of financial information it is intending to collect in an annual information statement so as to allow charities to have adequate time to commence collecting the requisite financial information as from 1 July 2012. To reduce the compliance burden, it is envisaged that this collected information will be provided to other federal government agencies.
It is anticipated that as from 1 July 2013, public companies limited by guarantee will only have to report to the ACNC and the ACNC will then pass on the relevant information to ASIC. This means that there will be less reporting involved vis-à-vis ASIC.
Review of existing charities
Once a statutory definition of ‘charity’ is introduced as from 1 July 2013, the ACNC will be in a position to review the eligibility of existing charities to their endorsements as charities. This may result in some charities losing their current endorsements.
An NFP is an organisation, trust etc which is not endorsed by the ATO as a charity, but is nevertheless operated on a not for profit basis. An example is a professional association.
What do existing not for profits need to do prior to 1 July 2012? The answer is nothing.
At this stage in time, NFPs do not need to do anything to prepare for the commencement of the ACNC.
NFPs may need to register with the ACNC at some point in the future, but not now.