In this month’s social sector spotlight, we share key updates and highlight upcoming events in the sector, including the 11th edition of the Australian Charities Report and a recently published de-identified registration decision summary from the Australian Charities and Not-for-profits Commission (ACNC) relating to an organisation ‘engaging in community sport’.
We also feature our article ‘Charities and NFPs: Expect the ATO’s spotlight to intensify’ where we discuss heightened scrutiny by the Australian Taxation Office (ATO) of governance practices, fund accumulation and investment strategies, related-party and cross-border dealings and the interaction between ATO and ACNC compliance activities.
Research and resources
ACNC published 11th edition of the Australian Charities Report
Over the past 11 years, the ACNC has built a substantial data resource and used it to map trends based on the Annual Information Statements (AIS) submitted by charities to the ACNC. The 11th edition analyses the 52,627 AIS from the 2023 reporting period. Key highlights include:
The number of registered charities continues to grow – with about 1,100 more AIS compared to the previous year.
Charities continue to be a key driver of the economy – providing a broad range of services in education, health, environment, social services and the arts to name a few.
Cost of living factors continue to impact charities – although revenue reached a record high of $222 billion this year (a rise of 10.7% from the previous year), expenses also grew by 8.4% to $212 billion with extra small charities significantly affected with the highest increase in expenses with a 21.4% hike.
The charity workforce increased by 10.5% – data shows the charity sector is a major employer, now employing over 1.54 million people (amounting to 10.7% of Australia’s entire workforce).
Charities continue to rely on volunteers – with more than half of all charities with no paid staff and relying on the efforts of around 3.77 million volunteers in total for the 2023 reporting period.
Read the full Australian Charities Report 11th edition.
The ACNC also invites everyone to explore the full interactive Charity Data Explorer where you can compare key statistics state by state or by post code. You can also access previous editions of the Australian Charities Report in the Charity Data Hub.
ACNC decision summary: charitable purposes and ‘promoting sport’
The ACNC published a new de-identified registration decision summary about an organisation which applied for charity registration with an object of ‘engaging in community sport’. This decision summary demonstrates the reasoning the ACNC uses when organisations apply for charity registration and have purposes which may or may not be charitable.
Generally, the purpose of ‘promoting sport’ is not a recognised charitable purpose. However, where sporting activities are promoted to further a charitable purpose, sport may be a means to a charitable end and may not prevent charity registration.
The ACNC generally requires more information from organisations to determine whether its object of engaging in community sport amounts to an independent non-charitable purpose of ‘promoting sport’. For example, the ACNC accepts from a holistic view that participating in and raising awareness of, the fundraising appeals of other charities which run sporting activities to raise funds for medical research does not amount to having an independent non-charitable purpose of promoting sport.
Some non-charitable not-for-profit sporting organisations may self-assess as income tax exempt and, if permitted to do so, are required to lodge an annual not-for-profit self-review return with the Australian Taxation Office. Kindly reach out to our charity law experts if you require any assistance or advice regarding whether your sporting organisation could be registered as a charity or self-assess as income tax exempt.
Access the latest de-identified registration decision summary - organisation undertaking community sport programs.
627 Charities lose their registration for failing to report
The ACNC has revoked the charity registration of 627 organisations after they failed to submit two or more Annual Information Statements (AIS) despite receiving final reminders.
Failure to report to the ACNC not only leads to loss of charity registration but also forfeits an organisation’s eligibility for certain Commonwealth tax concessions.
Charities which have had their registrations revoked can apply for reinstatement by submitting the overdue AIS and reapplying for registration.
The ACNC stresses to charities the importance of timely and accurate reporting to maintain public trust, confidence and transparency within the sector. If your organisation is facing deregistration, wants assistance in applying to have its registration reinstated or generally requires assistance with regulatory compliance and reporting requirements, please do not hesitate to reach out.
Access more information regarding this update: ACNC - Failure to report sees 627 charities lose their registration.
Charities and NFPs: Expect the ATO’s spotlight to intensify
Following the May 2025 federal election, the Albanese Government is expected to allocate nearly $1 billion to the ATO to extend and expand tax compliance activities, with a focus on the charity and not-for-profit sector.
In this month’s article, we discuss the ATO’s heightened scrutiny of governance practices, fund accumulation and investment strategies, related-party and cross-border dealings and the interaction between ATO and ACNC compliance activities. We also outline practical steps boards should take now to assess compliance, prepare for potential investigations and confirm eligibility for tax concessions.
Read our article Charities and NFPs: Expect the ATO’s spotlight to intensify.
Announcements and reminders
Public consultation on giving fund reforms
On 5 December 2024, the government announced it would improve the support provided to charities through ‘giving funds’ (currently described in tax law as ancillary funds) by:
Aligning and increasing the minimum annual distribution rate for public and private ancillary funds.
Allowing funds to smooth their minimum annual distributions over three years.
Renaming ancillary funds in the tax law to ‘giving funds’ to reflect their role in giving to deductible gift recipient (DGR) endorsed charities.
Treasury invites feedback on the proposed changes described above. The consultation paper outlines how a higher distribution rate will affect funds and charities and describes the principles for smoothing distributions.
Consultation is open until 1 August 2025, visit Treasury – Giving fund reforms: distribution rate and smoothing for more information.
Upcoming events and webinars
CLAANZ Annual Conference
The upcoming Charity Law Association of Australia and New Zealand (CLAANZ) Annual Conference will explore current issues in charity law. Topics covered include governance, accumulations and reserves, regulatory approaches, complex charitable structures, current issues in social housing, managing privacy reforms, AI issues, cy-près / judicial advice applications and cross-jurisdictional charity cases. Keynote speaker Professor Matthew Harding will consider the topic ‘Reimagining Charity Law’.
Dates: Monday 28 July to Tuesday 29 July 2025.
Time: Commences after lunch on Monday and continues with a full day on Tuesday.
Location: Victorian Bar, Owen Dixon Chambers East, Level 5, 205 William Street, Melbourne and online.
Cost: $200 for members and $400 for non-members. Concession and online rates also available. Please confirm details on the CLAANZ website to determine the ticket and pricing option that is best for you.
Our very own Darren Fittler will be speaking on a panel to discuss current issues in social and affordable housing. Elizabeth Lathlean will be speaking on a panel to discuss accumulations and reserves.
For more details and to register, visit 2025 CLAANZ Annual Conference and AGM.
ACNC Governing for Good Forum
The ACNC Governing for Good Forum (previously known as the ACNC Regulators Day) will bring together charities, government agencies, sector representatives, charity law and accounting professionals and advisers to reflect on the sector's regulatory developments and explore the regulatory landscape.
Date: Wednesday 30 July 2025 (the day after the CLAANZ Annual Conference).
Time: 10am to 3:30pm.
Location: The Event Centre, Tower 2, Level 5, 727 Collins Square, Docklands and online.
Cost: Free (but spaces are limited).
For more details and to register, visit the event page.