All registered charities in Australia must report annually to the Australian Charities and Not-for-profits Commission (ACNC). For charities operating within complex group structures, meeting these obligations can create a significant administrative burden.
To ease that burden, the ACNC offers two reporting mechanisms:
- group reporting
- bulk lodgement.
Group reporting allows a group of registered charities to submit a single Annual Information Statement (AIS) and financial report on behalf of the group. Bulk lodgement enables 10 or more registered charities to submit multiple AISs through a single form.
As the ACNC sharpens its regulatory focus on complex group structures, charities should understand how these reporting pathways operate and whether they may apply to their organisation. Complex structures are increasingly common in the for-purpose sector, particularly in community housing, specialist disability accommodation and other land-rich structures. Providers often operate through a parent and special purpose vehicle model for portfolio management of assets, or a HoldCo, OpCo and PropCo model for commercial flexibility and risk isolation.
We explain the key features of group reporting and bulk lodgement, how they differ and what charities should consider when deciding whether either approach is right for them.
What is group reporting?
Group reporting allows registered charities within a group structure to consolidate their annual reporting to the ACNC. Rather than each charity lodging its own AIS and financial report, the group reports collectively.
The ACNC recognises two forms of group reporting:
- Joint reporting: a group of two or more registered charities submits a single AIS and one financial report (if required) covering all charities in the group (see below for more information on reporting requirements).
- Collective reporting: a group of registered charities submits one or more AISs or financial reports on another basis (such as, by activity type rather than by individual entity). For example, a reporting group of affiliated charities that advances religion and relieves poverty may prepare and lodge two financial reports: one for the reporting group’s religious functions and one for its welfare functions.
(Note: collective reporting is not the same as bulk lodgement).
Tip:
You can check whether a charity forms part of an ACNC reporting group on the ACNC Register.
Approval for group reporting applies only to ACNC reporting obligations. It does not affect reporting obligations to other Commonwealth, state or territory agencies.
Creating and ending a reporting group
Charities must apply online to the ACNC to establish a joint or collective reporting arrangement. An application should be submitted within six months after the reporting period ends.
As group reporting can affect the operations and governance of participating charities, organisations should seek advice before entering into an arrangement.
Unlike income tax consolidated groups, not all eligible members of a corporate group must join an ACNC reporting group. However, grouping only some entities may complicate administration.
The ACNC assesses applications against the principles set out in the Commissioner's Policy Statement (CPS 2013/05) on group reporting.
When assessing an application, the ACNC considers:
- the public interest in transparency and accountability
- its ability to assess compliance and the impact of group reporting on compliance
- whether the charities in the reporting group have access to the same or different tax concessions
- the relationships between the charities in the reporting group
- administrative costs of the charities in the group.
Once approved, a reporting group continues unless the:
- charities decide to end the arrangement
- ACNC revokes approval, for example, because the group has failed to comply with reporting conditions.
A Basic Religious Charity cannot form part of a reporting group.
Note:
A Basic Religious Charity is a registered charity with the charitable purpose of advancing religion and meets specific criteria, including being unincorporated, operating on a not-for-profit basis and having no deductible gift recipient (DGR) endorsement beyond the operation of a DGR fund...
Group reporting conditions
Approved reporting groups must comply with five ACNC reporting conditions:
- Compliance with Australian Accounting Standards. A reporting group’s annual financial report must comply with Australian Accounting Standards AASB 10 (Consolidated Financial Statements) and AASB 12 (Disclosure of Interests in Other Entities) to the fullest possible extent, or include a disclosure note explaining any non-compliance and the extent to which compliance was impracticable.
- Identification of deductible gift recipients. A reporting group’s members endorsed as a DGR (either as a whole entity or to operate a DGR fund) must be clearly identified in the annual financial report. A reporting group that includes a DGR may be required to disclose deductible donations received and how those donations were spent in its AIS and financial report notes.
- Disclosure of non-charity members. Where a reporting group includes entities that are not registered with the ACNC, the consolidated financial report must clearly distinguish the financial information of registered charities from non-registered entities. Only the financial information of registered charities may be included in the AIS.
- Special purpose financial statement. A medium or large non-reporting group preparing a Special purpose financial statement must comply with AASB 124 and include disclosures about related party transactions and the remuneration of key management personnel. This condition does not apply to small charities.
- Compliance with ACNC reporting obligations. Reporting groups must comply with all ACNC reporting obligations, including lodging the AIS on time.
The ACNC may also impose additional conditions to address specific transparency or accountability concerns.
The ACNC reviews reporting groups annually and may revoke approval where a group fails to comply with applicable conditions. As these conditions are subject to change, reporting groups should review the current requirements each year when preparing their AIS and financial report.
Reporting group size
Charity reporting obligations in Australia are determined by an organisation’s annual revenue, with charities classified as ‘small’ (less than $500,000), ‘medium’ ($500,000 to $3 million) and ‘large’ (more than $3 million) for reporting periods.
All registered charities must submit an AIS. Small charities may choose to submit an annual financial report. Medium and large charities must submit annual financial reports (accrual basis). Large charities must have their financial reports audited, while medium charities may choose to have their reports reviewed or audited. A Basic Religious Charity is not required to submit an annual financial report.
The size of a reporting group is determined by the size of its largest charity. This means a reporting group will be:
- Large if one or more of its charities is large.
- Medium if none of the charities are large and one or more of its charities is medium.
- Small only if none of its charities are medium or large.
This matters when a reporting group contains a mix of different sized charities. The requirement to keep audited accounts will apply to the whole group, even if only one entity in the group is large.
How does group reporting differ from bulk lodgement?
Bulk lodgement allows a single lodger to submit multiple AISs on behalf of several charities through a single form. This arrangement is commonly used by:
- corporate trustees administering multiple charitable trusts
- denominational administration offices responsible for multiple religious charities.
Unlike group reporting, charities using bulk lodgement continue to report individually. Each charity’s information is included within a single form rather than through separate portal lodgements.
Bulk lodgement does not require formal ACNC approval. However, bulk lodgers should notify the ACNC of the arrangement to avoid duplicate submissions and to receive the bulk lodgement form when available.
Practical considerations for bulk lodgement
Bulk lodgers must ensure they have authority to lodge on behalf of all participating charities and follow the ACNC’s prescribed process for preparing and amending a bulk AIS.
Bulk AISs are submitted to the ACNC by email and charities may submit financial reports through a secure file transfer process.
The ACNC also requires bulk AISs to be lodged on time. If a bulk submission is late, the ACNC may decide not to offer the bulk lodgement option in future years.
What does this mean for your charity?
Group reporting and bulk lodgement can significantly reduce administrative burden for charities operating within group structures. However, each pathway comes with its own conditions and compliance requirements.
Before deciding which mechanism (if any) is most appropriate, charities should carefully assess their governance arrangements, organisational structure and existing reporting obligations.
If you would like to explore whether group reporting or bulk lodgement may be suitable for your organisation, or confirm your charity is meeting its ACNC reporting obligations, please get in touch with our specialist Charities and Social Sector lawyers.