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Not-for-profit Stewardship Group key messages 14 July 2026

Key topics discussed at the Not-for-profit Stewardship Group meeting 14 July 2026.

Published 14 September 2026

NFP tax administrator update

The Australian Taxation Office (ATO) provided an overview of the 2025–26 year in review, and the Australian business number (ABN) registered not-for-profit (NFP) population as of July 2026, noting ongoing transformation in the sector, including:

  • movement between self-assessing income tax exempt organisations
  • endorsed tax concession charities
  • growing taxable cohort.

This shift is being observed through the self-review return process, with some organisations realising they may be taxable and either lodging income tax returns or a non-lodgment advice.

We acknowledged the sector’s significant contribution across the tax and super system, including through employment taxes and superannuation obligations.

Members were thanked for their contribution to the Not-for-profit Stewardship Group (NFPSG) and for re-nominating, with most existing members indicating they wished to continue. A total of 29 nominations were received.

We remain keen to include an Indigenous representative on the stewardship group and invited members to draw on their networks to identify a suitable person who could contribute to the group's work. The new membership will be in place prior to the next meeting in November 2026.

Members were given an update on public advice and guidance matters that were previously raised and were invited to provide practical examples that could help shape the guidance updates currently underway.

Proof of record ownership

Proof of record ownership requirements for deductible gift recipient (DGR) and tax concession endorsement applications was discussed, particularly where applications are received via the Australian Charities and Not-for-Profits Commission (ACNC) and do not include an authorised contact on ATO systems.

We explained we are working with the ACNC to explore options to make our authorisation requirements clearer to applicants and to obtain this information earlier in the ACNC application process to avoid subsequent delays in processing.

NOTE – subsequent to the meeting, updates were implemented at Registration application checklist and guideExternal Link, under both the tax concessions and DGR sections.

ABN application and process improvements

The ATO outlined work underway to improve the ABN application experience for NFPs, noting that many issues for taxpayers and administrators begin with outdated or inaccurate Australian business register (ABR) information and confusion in the options available to them in the ABN application process.

We advised the ABR platform was designed before the NFP self-review return, and isn’t reflective of the distinctions between:

  • taxable NFPs
  • self-assessing income tax exempt NFPs
  • registered charities.

Improvements considered include:

  • questions regarding legal structure
  • organisation type
  • activity type
  • key questions that effectively determine the reporting system an organisation enters.

Tailored instructions are being considered to help NFPs determine whether they are taxable, self-assessing income tax exempt or charitable before applying for an ABN.

Members raised concerns about correcting details where an organisation had incorrectly selected its entity type. We advised that, where a genuine administrative error has occurred, we will consider correcting the entity type if supporting evidence is provided and the correction is within the same entity group. Where there has been a change to the organisation's structure, a new ABN will be required. For further details see Changing your business structureExternal Link.

Members will be kept informed of the progress of these changes as they develop.

Compliance

The ATO has undertaken significant education and support activities to help NFPs understand and meet their NFP self-review return obligations. These activities have included:

  • targeted emails
  • SMS messages
  • letters
  • broader communications and stakeholder engagement.

Our compliance approach is evolving from primarily support and education to also include a greater number of compliance interactions.

The compliance focus will include DGR integrity, whether organisations are correctly classified for income tax exemptions, and whether self-review return outcomes are accurate.

Will continue to support voluntary compliance, but deliberate non-compliance and higher-risk behaviour will attract greater attention. Members discussed the importance of making this change transparent to the sector so that advisers and NFPs understand compliance focus areas and can take early action to remedy any errors.

Members discussed practical challenges for advisers and NFPs where historical lodgment obligations may be unclear or significant. We encourage organisations to act and bring their affairs up to date, particularly in relation to current obligations.

ACNC

The ACNC highlighted the release of the latest Australian Charities Report – 12th EditionExternal Link and noted that the data continues to provide a rich source of information about the charity sector, including:

  • resilience issues
  • inflationary pressures
  • funding dynamics
  • increasing pressures facing smaller charities.

The ACNC advised that its regulatory focus areas for 2026–27 will be supporting charities to understand the value of maintaining strong governing documents and managing relationships with partners effectively. The ACNC’s regulatory activities will continue to emphasise using a proportionate, risk-based approach that prioritises education and guidance for minor issues and escalate to targeted compliance reviews and use of enforcement powers in response to serious risks.

Looking back, the ACNC shared insights into its regulatory work in 2025–26, noting increases in the number of closed investigations, a slight increase in revocations of registration for serious matters, and the first use of the power to suspend a responsible person. Compliance and enforcement powers were used where charities demonstrated significant financial record-keeping deficiencies, unaddressed safeguarding concerns, substantial activities for private rather than public benefit, or charities pursuing unlawful activities or disqualifying purposes.

Payday Super

Payday Super commenced on 1 July 2026, with the first 2 weeks of transition operating broadly as expected. Employers, intermediaries and super funds are engaging with the new requirements and raising implementation questions as they begin adapting to the changes.

Key points included:

  • The ATO's first-year approach is focused on supporting employers who are making a genuine effort to comply. Employers who attempt to meet their obligations, make mistakes and promptly correct them will generally be considered low risk.
  • Compliance activities will focus on higher-risk employers, particularly those that were not meeting their previous quarterly super obligations or are not making a genuine attempt to comply with Payday Super requirements.
  • To support the transition, we have expanded our communications and guidance materials, including updated web content, fact sheets, checklists, videos, webinars and a new compliance guide. The guide outlines common mistakes, how to correct errors and our compliance focus areas.
  • July is a critical transition period, as many employers may need to manage obligations under both the former quarterly super guarantee arrangements and the new Payday Super requirements.
  • The super guarantee voluntary disclosure statement process, including that a short-form statement has been published for the first year and work is underway with digital service providers on a software-based process for later years.

Payday Super resources:

ATO strategy update and discussion

The ATO discussed the ATO Strategy 2026–30, noting that while it applies across the tax and superannuation system, including the NFP sector, it has been intentionally designed as a whole-of-system strategy rather than an NFP-specific framework.

The strategy’s vision is ‘an Australia where every taxpayer meets their obligations because complying is easy, help is tailored, and deliberate non-compliance has consequences’.

The strategy is underpinned by 5 strategic shifts:

  • simplifying the tax experience
  • closing the payment gap
  • strengthening the system so it works fairly and as intended
  • partnering across the ecosystem
  • building a future-ready workforce.

It was noted that while digital self-service will play an increasingly important role in improving the client experience, the strategy also recognises the ongoing need for tailored support where it is most needed.

Sector reflections and future priorities

Members discussed emerging issues across the sector, including hybrid structures involving:

  • NFP and for-profit entities
  • private benefit
  • public benevolent institution arrangements
  • related party transactions.

Members noted the value of practical guidance and examples that help organisations understand key risk areas and governance considerations.

Members emphasised that hybrid structures are not inherently inappropriate and can support charitable and community outcomes when appropriately governed. Discussion focused on:

  • the importance of purpose
  • managing private benefit and related party arrangements
  • ensuring that activities and benefits remain directed towards charitable objectives.

Members discussed increasing sector pressures, particularly for smaller NFPs and volunteer-led organisations. Challenges raised included:

  • financial sustainability
  • difficulties recruiting and retaining board members and treasurers
  • growing reliance on bookkeepers
  • insurance costs
  • regulatory obligations
  • broader administrative demands.

Members noted the risk that these pressures may affect the viability of some grassroots organisations.

Members highlighted the importance of designing systems, processes and guidance that are accessible and practical for small, volunteer-run and resource-constrained organisations. Suggestions included:

  • clearer guidance during ABN registration
  • practical support for newly established organisations
  • reminders to keep authorised contact details up to date
  • stronger alignment between tax obligations, governance practices and board-level responsibilities.

Treasury

Treasury provided a budget and legislative update, including discussion of announced trust and capital gains trust changes relevant to the sector. They advised that consultation on Minimum tax on discretionary trustsExternal Link remains open until 31 July 2026.

Members discussed the potential impact of trust changes on philanthropic giving. Treasury noted that government’s broader focus is improving equity and fairness in the tax system.

Treasury also advised that the government intends to remove the ministerial declaration step from the community charity DGR category, while leaving the category itself and the role of the ACNC and the ATO’s endorsement role unchanged. Treasury noted that this change is not yet law and that the existing ministerial declaration process remains in place until legislative change occurs.

Other legislative updates included:

  • royal assent for the removal of the minimum $2 deductibility threshold for deductible gifts
  • passage of registry stabilisation and uplift changes enabling Australian Securities and Investments Commission to use information from other regulators
  • introduction of legislation to rename ancillary funds to giving funds as a precursor to further giving fund reforms.

New measures update

The ATO provided the following updates on the Philanthropy – support to double philanthropic giving by 2030.

Removal of the $2 minimum threshold for deductible gifts to DGRs from 1 July 2024:

  • Gifts and donations guidance has been updated to remove references to the $2 threshold, including updates to the gifts and donations poster and Tax Time Toolkit.
  • Donation-related material is being consolidated into the main gifts and donations page to provide a single source of truth for donors and DGRs.
  • Renaming ancillary funds to giving funds, allowing ancillary funds to smooth distributions over 3 years, and resetting and aligning minimum distribution rates at 6% for public and private ancillary funds.
  • System and administrative design work is continuing in anticipation of legislative changes, including communications planning to help ancillary funds understand the reforms as they become law.
  • The proposed communications approach includes staged messaging after legislation passes, when guidelines are updated, and close to the end of the transition period for minimum distribution rate changes.

Members noted that smoothing will require particular focus because it is new and will need to be explained clearly, including when and how it applies and how the ATO will understand whether funds are applying smoothing correctly.

Community charities DGR category

An update on consultation for the proposed community charity return was provided. Feedback from sector participants received to date included, broad recognition of the need for reporting that helps demonstrate community charities are meeting their obligations, while ensuring the return remains proportionate, practical and easy to understand; that the return should generally be modelled on the ancillary fund return, recognising that community charities have similar governance and distribution considerations, while differing in their purposes, activities and distribution requirements.

Members highlighted the importance of clear guidance and reporting prompts to help organisations distinguish between reporting distributions and activities more broadly.

We advised that, if the ministerial declaration requirement is removed, a broader range of organisations may consider the community charity category. Members emphasised the importance of providing clear guidance on the intent of the category, eligible purposes and distribution requirements to support organisations in understanding and meeting their obligations.

We will continue consultation with community charities and the stewardship group to refine the design of the new return and consider practical guidance and examples to support understanding of permitted purposes and distribution principles.

Attendees

Attendees list

Organisation

Attendee

ATO

Rowan Fox (Co-chair), Small Business

ATO

Tom Wheeler, Small Business

Australian Charities and Not-for-profits Commission

Cate Bennett

Charitas Law

Jae Yang

Charities and Not-for-profits Committee, Law Council of Australia

Seak-King Huang

Clubs Australia

Simon Sawday

HWL Ebsworth

Timothy Stokes (Co-chair)

Institute of Certified Bookkeepers

Rob Marshall

Justice Connect

Geraldine Menere

KPMG

Kaylene Hubbard

Not for Profit Accounting Specialists

Ellie Patterson

Philanthropy Australia

Krystian Seibert

Queensland Muslims Inc

Habib Jamal

Saward Dawson

Cathy Braun

SW Accountants and Advisors

Stephen O’Flynn

The Salvation Army Australia

John McIntosh

The Tax Institute

Morag Ingham

Treasury

Peter Robjent

University of South Australia

Kristian Thoroughgood

World Vision Australia

Ben Scuteri

Guests

Guest attendees list

Organisation

Attendee

ATO

Marisa Hewitt, Small Business

ATO

Matthew Faltas, Small Business

ATO

Melinda Knight, Small Business

ATO

Richard Robinson, Small Business

ATO

Sourina Simmalavong, Small Business

ATO

Usha Narian, Superannuation and Employer Obligations

ATO

Virginia Hernandez, Small Business

Apologies

Apologies list

Organisation

Member

Arnold Bloch Leibler

Jessica Wills

QC108032