Not-for-profit Stewardship Group key messages 17 March 2026

Group refresh

The Not-for-profit Stewardship Group (NFPSG) will be undergoing a membership refresh this year. Further information on the refresh, including how to nominate, will be shared via the not-for-profit (NFP) newsletter.

ATO strategy

An overview of the ATO draft strategy was provided, which outlines our strategic direction to 2030. Members provided feedback on the draft document, including how the strategy supports their work, the language for NFPs, and the overall design. Members also acknowledged and supported the direction of an overarching strategy.

General administrator update

An update was provided on matters the NFP branch has been progressing since the last stewardship group meeting in November 2025. This included increased attention and queries directed to the Australian Taxation Office (ATO) in relation to deductible gift recipients (DGRs) following the tragic Bondi incident in December, as well as an update on the progress of NFP self-review return lodgments.

NFP self-review return update:

• Targeted campaigns are being used to encourage taxpayers who have not lodged their self-review return to do so, with each campaign resulting in increased client engagement.
• Lodgments continue to show NFPs identifying as taxable, as well as NFPs that are charitable and likely to be eligible to register with the Australian Charities and Not-for-profits Commission (ACNC) as a charity and be endorsed as income tax exempt by the ATO.
• A significant number of taxpayers have also cancelled their Australian Business Number (ABNs), reflecting that they are no longer operating.
• Analysis is underway to identify sub-populations with lower lodgment rates, with a focus on reinforcing obligations, addressing misconceptions about taxable NFPs, and encouraging non-operating entities to cancel their ABNs.

Statement of tax record

An update on the Statement of Tax Record (STR) and the NFP self-review return was provided, including how these requirements may apply to NFPs:

• NFPs may be required to provide a STR to government agencies as evidence of satisfactory engagement with the tax system when tendering for Commonwealth procurements valued at $4 million or more, or when applying to administer the Child Care Subsidy (CCS) program.
• To obtain a satisfactory STR, entities must be up to date with registration requirements, have lodged at least 90% of obligations over the previous 4 years, and have no overdue undisputed debts of $10,000 or more (or have an agreed payment plan in place).
• From 1 July 2026 (subject to system updates), the NFP self-review return will be included in the 90% lodgment requirement.
• NFPs should ensure any outstanding self-review returns are lodged to maintain a satisfactory STR and avoid impacts on government contracts or CCS eligibility.
• Further information is available at Statement of tax record.

Payday super

The following update on Payday super was provided noting:

• Current activity is focused on raising employer awareness through targeted communications across multiple channels
  • updated web guidance has been released, including refreshed content and fact sheets developed in consultation with the sector
  • webinars are being delivered to support employer understanding and assist with practical preparation for commencement
  • direct communications, including letters to be issued in April, are raising awareness of upcoming changes and directing employers to available support and guidance.
• It is working closely with digital service providers to support delivery and assist employers with the transition.
• Employers are encouraged to begin preparing now to ensure they are ready for commencement on 1 July 2026, helping to support a smooth transition and minimise potential cash flow impacts arising from the new payment timing.
• The Payday Super Communications Toolkit (PDF, 589KB)This link will download a file has been developed, which includes key messages and content to support stakeholders in sharing consistent information with their networks.

Compliance update

ATO compliance approach and focus areas

The What attracts our attention section of the Helping not-for-profits get it right presentation outlines key risk areas and ATO’s compliance focus.

Planning for 2026–27 is underway, with the compliance approach forming a key component. There will be an increased emphasis on deductible gift recipients (DGR) compliance, including a risk-based assessment of the new community charity DGR category and consideration of appropriate oversight to ensure DGRs operate for purpose and apply funds in line with their charitable objectives.

NFP self-review return

Administration of the NFP self-review return will be transitioned into a business-as-usual environment, with a gradual shift from education and support to a stronger compliance focus.

While non-lodgment has been an initial focus, improving transparency and confidence in the system remains a key objective, with lodgment data providing greater visibility and assurance across the NFP population.

Insights from lodgment data will inform engagement strategies, including supporting timely lodgment by larger and more established NFPs, and identifying organisations that may be unaware of their obligations.

Focus will also include transitions in entity status, ensuring organisations appropriately move to charitable or taxable status and meet their corresponding obligations including lodging income tax returns (where relevant).

Emerging risks

Taxpayer Alert 2025/3 Arrangements to improperly access deductions for donations of 'barter credits' was published in November 2025, highlighting concerns with arrangements involving the donation of artificial barter credits to DGRs to claim inflated deductions.

Public guidance

An overview of the public guidance and review process was provided highlighting:

• The ATO values the insights and feedback provided by members and considers all suggestions for public advice and guidance.
• Not all proposals progress to formal guidance products, with decisions informed by a structured prioritisation and risk assessment process.
• Prioritisation considers factors such as community need, prevalence, revenue and reputational impacts, alignment with ATO strategy, and links to government initiatives or compliance activity.
• While some guidance products are currently under development, other matters may be addressed through alternative channels outside the formal process. These may include website updates, targeted communications, or newsletters, where appropriate.
• The ATO is committed to providing clearer feedback to members on how suggestions are considered, including where further evidence or examples would assist in progressing an issue.

An update on Draft Taxation Determination TD 2025/D3 Income tax: when does a private or public ancillary fund 'provide' a 'benefit'? was provided including:

• Consultation has closed, and the ATO is considering extensive stakeholder feedback.
• Members were provided an overview of key themes emerging from the feedback received. Submissions raised policy, interpretative and practical issues for the sector.
• The ATO will continue refining the draft and keep members informed of progress.

Australian Charities Not-for-profits Commission

The ACNC was pleased to see 74% of charities required to submit an Annual Information Statement by 31 January did so on time, which represents a 2% increase on the previous year, and captures a substantial number of newly registered charities reporting for the first time.

The ACNC has been contributing technical advice to support the mutual evaluation of Australia’s compliance with the Financial Action Taskforce Recommendations, which is a whole of government undertaking coordinated by the Department of Home Affairs.

The ACNC recently completed compliance reviews and a program of mandatory self-audits with around 270 charities, seeking to understand how well charities understand and meet their obligations to manage financial risks associated with operating overseas in different contexts.

The first authorised disclosure of an investigation into a charity following amendments made in December 2025 to the secrecy provisions set out in the ACNC Act.

A range of new guidance and educational tools published on the ACNC website, along with planning sector engagement through webinars, forums and other means.

Roundtable

The member-led session offered opportunity for members to raise insights and perspectives beyond the formal agenda, with key themes including:

• Public advice and guidance – members identified topics that may benefit from a review. The ATO acknowledged the feedback and will consider the items raised and provide an update on progress.
• Community charity DGR category – members noted the category is still being understood and continues to generate queries regarding purpose and activities. Further guidance and clarification were suggested by members.
• Fringe benefits tax – members highlighted ongoing areas of misunderstanding despite existing guidance. Suggestions included focusing on common issues such as director remuneration, entertainment fringe benefits and GST interactions.

Treasury

Treasury provided an update on Minister Leigh's announcement on 26 February 2026External Link, which included the addition of 34 organisations to the ministerial declaration for community charities.

New measures

An update was on recent and upcoming measures was presented including:

• Community charities
  • Community charities must submit a proposal to Treasury, register as a charity with the ACNC, and then apply to the ATO for DGR endorsement. Community charities can apply for DGR endorsement at the time of ACNC registration.
  • To date, 5 community charities have been endorsed. A further 34 organisations were added to the ministerial declaration on 26 February 2026 (as noted in the Treasury update).
  • Inclusion on the ministerial declaration alone does not give community charities DGR status. Community charities must also be registered with the ACNC and apply to the ATO for DGR endorsement.
  • Guidance is currently focused on endorsement requirements and will be progressively updated to provide further clarity on purposes, activities and minimum annual distribution requirements.
  • Development of the community charity return is at an early stage. The ATO will consult with the sector, including Community Foundations Australia and the NFPSG.
• DGR and ancillary fund reforms
  • Proposed reforms include removal of the $2 minimum threshold for deductible gifts (intended to apply from 1 July 2024, subject to enactment).
    • Current administrative practice will continue, including reporting donations in whole dollars and assessing deductibility based on total annual donations rather than individual transactions.
    • Substantiation requirements vary by entity type, with specific receipt requirements for ancillary funds and some charities, and alternative records acceptable for other DGRs.
    • The ATO will continue to work with the sector on implementation of reforms and is seeking insights from members on sector understanding, emerging issues (including low-value and digital donations), and whether further guidance or support is required.
  • Additional proposed reforms relate to ancillary funds, including renaming, smoothing of distributions over a three-year period, and an increase to the minimum annual distribution rate to 6%. Transitional arrangements are expected to apply. The ATO will update guidance, systems and products progressively, with consultation on implementation to support a smooth transition.

Australian Institute of Company Directors

Australian Institute of Company Directors (AICD) provided an update on developing practical guidance on NFP director remuneration noting:

• There is an increase in governance expectations, rising director time commitments, and stronger board engagement.
• Financial pressures remain uneven, with some organisations drawing on reserves, although overall sentiment remains positive.
• Director remuneration continues to evolve, with around 27% of organisations remunerating directors and others actively considering it.
• AICD guidance will support boards, including a structured decision-making framework covering purpose, risk, stakeholder engagement and implementation, supported by case studies and examples.
• Feedback highlighted demand for clearer guidance on tax, superannuation and legal considerations, as well as improved benchmarking data.
• The resource is expected to be released mid-year, with further opportunities for engagement.

ATO app

The ATO provided an update on enhancements to the ATO app as a key digital channel supporting improved client experience and self-service.

The app enables individuals (including NFP staff and volunteers) to securely access tax and super information, track lodgments and refunds, and manage records such as deductions and receipts.

Ongoing enhancements are focused on improving usability and accessibility, expanding functionality, and strengthening security.

Stakeholders are encouraged to promote the app within their networks, with further updates and demonstrations to be provided through stakeholder forums.

Attendees

Attendees list

Organisation	Attendee
ATO	Rowan Fox (Co-chair), Small Business
ATO	Tom Wheeler, Small Business
Arnold Bloch Leibler	Jessica Wills
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
Giuntabell	Nunzio Giunta
HWL Ebsworth	Timothy Stokes (Co-chair)
Institute of Certified Bookkeepers	Rob Marshall
KPMG	Kaylene Hubbard
Not for Profit Accounting Specialists	Ellie Patterson
Philanthropy Australia	Krystian Seibert
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	Alison Cone, Australian Charities and Not for Profit
ATO	David Allen, ATO Executive
ATO	Fran Gobel, Small Business
ATO	Glenn Cooper, Private Wealth
ATO	Marisa Hewitt, Small Business
ATO	Matthew Faltas, Small Business
ATO	Naomi Westwood, Superannuation and Employer Obligations
ATO	Richard Robinson, Small Business
Australian Institute of Company Directors	Phil Butler
Australian Institute of Company Directors	Sean Dondas
Clubs Australia	Emily Brennan
Justice Connect	Amy Williams

Apologies

Apologies list

Organisation	Member
Clubs Australia	Simon Sawday
Justice Connect	Geraldine Menere
Queensland Muslims Inc	Habib Jamal