This month’s Social Sector Spotlight offers a comprehensive overview of the latest developments shaping the not-for-profit and charity landscape.
In this edition, our feature article provides an overview of the most commonly used legal structures available to charities and not-for-profits, exploring the key decision points when choosing between different structures and practical considerations for organisations contemplating a restructure.
We also bring you various sector updates including:
The updated Commissioner’s Interpretation Statement (CIS) on Public Benevolent Institutions (PBIs) issued by the Australian Charities and Not for profits Commission (ACNC).
The Australian Taxation Office’s (ATO) reminder that approved organisations with a three‑year extension have until 14 December 2025 to satisfy the new eligibility criteria for Deductible Gift Recipient (DGR) endorsement. Under this reform, all non-government entities seeking to obtain or maintain DGR endorsement (except for ancillary funds or DGRs specifically listed in tax law) must be either registered with the ACNC or operated by a charity registered with the ACNC.
We also highlight governance insights from the Australian Institute of Company Directors (AICD) on applying the ACNC’s guidance for complex charity structures.
The Canberra Times report revealing the impact of targeted Annual Information Statement (AIS) reminders on on‑time lodgement.
Information on the upcoming John Emerson Oration & Charity Law Association of Australia and New Zealand Annual Lecture.
A link to the ACNC’s complementary webinar offering guidance on submitting your AIS.
Research and resources
The best fit – structuring options and considerations for charities
Choosing the best legal structure is a critical step when establishing a charity. The structure you select will shape governance arrangements, member entitlements, regulatory obligations, reporting requirements and the organisation’s capacity for growth. For organisations already in operation, restructuring can create opportunities for expansion or streamline compliance, but it also requires careful planning to address legal, regulatory, and operational considerations. We provide an overview of the main not-for-profit structures available in Australia, highlight the key factors to consider when selecting between them, and outline practical steps for organisations considering a restructure involving a change in entity type.
Read our full article on The best fit – structuring options and considerations for charities.
ACNC releases updated PBI interpretation statement
On 29 September 2025, the ACNC released an updated Commissioner Interpretation Statement (CIS) on PBIs. The update was largely made to address the decision made in Equality Australia Ltd v Commissioner of the Australian Charities and Not-for-profits Commission [2024] FCAFC 115, but the opportunity was taken to also update the CIS more broadly.
In line with the decision, the updated PBI CIS now affirms the ordinary meaning of PBI will evolve over time, and the Commissioner will consider contemporary ways in which organisations collaborate and seek to relieve benevolent needs.
The CIS recognises PBIs may deliver relief directly or by working with others, and that a mix of direct support, capacity building, advocacy and preventative activities can qualify where targeted to people in need and connected to the relief of poverty, sickness, distress or analogous conditions. The guidance also states advocacy can form part of benevolent relief if it is sufficiently connected to relieving need, and it emphasises targeted relief to people in need rather than the community generally.
In response to the draft CIS, the ACNC was urged to frame the test as whether activities are apt to achieve benevolent purposes (more than a logical connection), to avoid language implying proof of causation or efficacy, and to remove any ‘steps to relief’ concept. The final CIS does remove the ‘steps’ formulation and affirms a holistic, case‑by‑case approach. However, it also introduces explicit evidentiary expectations for advocacy‑predominant entities, including any evidence that the relevant laws or policies are a predominant cause of the benevolent need and that the change sought would contribute to relief. It further illustrates, in Example 12, stronger terms like ‘causal connection’ and ‘effectively relieve’, which we believe go beyond the decision and risk elevating the practical threshold.
Read the ACNC’s updated CIS here.
DGR reforms - deadline approaching for approved organisations
Prior to 14 December 2021, certain non-government DGRs were able to operate and maintain their DGR endorsement without being registered as a charity with the ACNC. Following changes to the law, all non-government entities seeking to obtain or maintain DGR endorsement (except for ancillary funds or DGRs specifically listed in tax law) must be either registered with the ACNC or operated by a charity registered with the ACNC. Impacted organisations include, but are not limited to, cultural organisations previously on the Register of Cultural Organisations, environmental organisations previously on the Register of Environmental Organisations and approved research institutes. As part of the transitional arrangements in place, some pre‑existing DGRs were granted a three‑year extension for compliance by the ATO. Approved organisations under that extension have until 14 December 2025 to meet the new eligibility criteria for DGR endorsement, which includes registration as a charity with the ACNC.
If this is relevant to your organisation, whether you need to apply to the ACNC for registration as a charity, update governing documents or both, our team can help you plan and execute the steps now to safeguard endorsement and donor deductibility before the deadline.
Further information on these changes can be found on the ATO website here.
AICD insights - navigating ACNC guidance on complex charity structures
The AICD has unpacked the ACNC’s guidance for charities operating within complex structures, including groups with multiple entities, mixed legal forms, shared directors, related party transactions or cross‑jurisdictional operations. The high‑level message is complexity is not a problem, but it heightens governance risk and demands extra care. The guidance highlights seven focus areas:
Adopting fit‑for‑purpose policies.
Maintaining accurate, contemporaneous records.
Managing common boards and conflicts of interest (and duty).
Holding separate board meetings with clear minutes for each entity.
Maintaining an accurate organisational chart.
Adopting a robust conflicts of interest policy.
Actively identifying, documenting and testing related party transactions to ensure they further charitable purposes and are on arm’s‑length or more favourable terms.
Boards are encouraged to map their structure, resource directors appropriately and evidence compliance with the ACNC Governance and External Conduct Standards.
The AICD’s insights can be read here.
If your charity operates as part of a complex structure, get in touch with our team to learn how we can assist you in reviewing your current compliance.
Reminder emails and AIS compliance
An ACNC randomised trial testing whether an additional AIS reminder sent to a responsible person (alongside the standard organisational email) would improve on-time lodgement was the subject of recent reporting by the Canberra Times. Among 15,000 charities, the ‘extra email’ group lodged almost six percentage points more often on time and, on average, three days earlier. The standout takeaways are small, well‑designed interventions can meaningfully shift compliance behaviour. While there were marginal administrative costs in cleansing contact data and responding to queries, the net effect was improved timeliness, better registry accuracy and reduced last‑minute extensions, highlighting the value of building trials into routine regulatory practice.
For many charities which report to the ACNC on a standard financial year, the due date to submit the AIS is 31 January 2026. To ensure your details are up to date and you are receiving all communications from the ACNC, it is important to review your organisation’s contact details on the ACNC portal.
Read the Canberra Times article here.
Upcoming events and webinars
John Emerson Oration & Charity Law Association of Australia and New Zealand Annual Lecture
The sixth John Emerson Oration and Charity Law Association of Australia and New Zealand (CLAANZ) Annual Lecture will take place in Melbourne on 13 November 2025.
This year’s Oration will be delivered by Jennifer Batrouney AM KC, presenting “The Pledge, The Turn and The Prestige in the Grain Technology Case.” CLAANZ’s Annual Public Lecture welcomes all those interested in charity law and the not-for-profit sector. The event will explore current and significant legal issues affecting charities and not-for-profits in Australia and New Zealand.
The lecture is scheduled for Thursday 13 November 2025 from 5:00 pm to 7:00 pm at Melbourne Law School, with options to attend either in person or online. Registration closes 5:00 pm Thursday 6 November 2025.
Click here to register.
ACNC webinar - Everything you need to know about the Annual Information Statement
The ACNC is offering a complimentary webinar designed to support charities as they prepare to submit their Annual Information Statements. This session will provide step-by-step guidance throughout the process. The webinar will take place from 12:00 pm to 12:45 pm on Tuesday 28 October 2025.
Click here to register.
We acknowledge and pay respect to the custodians of the lands upon which our offices are located – the Gadigal people (Sydney), the Wurundjeri Woi-wurrung people (Melbourne) and the Whadjuk Nyoongar people (Perth), as well as all custodians across this nation.
We also recognise the continuing contribution Indigenous charities, not-for-profit organisations and their supporters, together with all First Nations Peoples, provide in addressing the unique systemic disadvantages arising from historical, societal and structural inequalities. It is an honour and a privilege to support this important work and we thank our First Nations clients, partners and friends for their generosity in sharing their knowledge, culture and experiences with us.