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Not-for-profit Stewardship Group key messages 24 March 2021

Information about the key topics discussed at the Not-for-profit Stewardship Group meeting 24 March 2021.

Last updated 6 May 2021

Welcome and introduction

Members were welcomed and an acknowledgement of country was given.

Apologies and other:

  • Joey Borensztajn received an AM in the Queen’s birthday honours list and his title is now Joey Borensztajn AM. Congratulations Joey!
  • Welcome to Michael Atfield, from Treasury, who is joining us today as a proxy for Jacky Rowbotham.
  • Sarah Wickham has left Philanthropy Australia and Krystian Siebert will be Acting Director of Policy and Research for Philanthropy Australia until the end of April 2021.
  • Juanita Pope has moved on from Justice Connect and Sue Woodward will continue to represent Justice Connect.
  • Amanda Spinks has resigned from EY and is no longer in the not-for-profit space and as such will not be continuing with the Not-for-profit Stewardship Group (NFPSG).
  • Joe Zabar has moved on from the Catholic Social Services Australia and is now working with the peak body for overseas charities – the Australian Council for International Development. Joe will remain with the NFPSG.
  • Welcome to Jae Yang, from Prolegis, who is joining us today as a guest.
  • Due to the abovementioned movements, we have three immediate vacancies in the NFPSG; an expression of interest to fill these vacancies will be issued. A membership refresh will be conducted separately.
  • Along with these external moves, Prescilla Moses was welcomed as secretariat.

No conflicts of interest were declared.

ATO update


A record of meeting minutes was published on 6 January 2021

Action items – All items are closed.

A summary of communications issued to members between November 2020 and March 2021 was provided. This included:

  • sharing a presentation with key ATO messages that can be referenced and shared across member networks
  • broadcast emails on the support available for not-for-profits, JobKeeper and JobMaker guidance, and changes to ATO online service offerings.

Technical updates

Goods and Services Tax Ruling GSTR 2012/2 Goods and services tax: financial assistance payments

The sub-working group met on 12 March 2021 to work through feedback from the sector that the current examples outlined in the ruling may be improved. The examples would provide greater certainty for both payers and recipients of grants.

The group is validating issues and has been tasked to provide specific examples that illustrate behavioural drivers in the sector.

Taxation Ruling TR 97/22 Income tax: exempt sporting clubs

The sub-working group is scheduled to meet on 1 April 2021. Working group members will consider and provide feedback on a draft revised ruling, which will be circulated prior to the meeting. Member feedback received to date, including revised examples, has been incorporated in the revised draft.

Depending on member feedback, the next step will be to open up public consultation on the draft ruling before publishing.

Australian Accounting Standards Board (AASB)

In November 2020, the AASB Board announced it would develop a paper for public consultation on the possible future of an NFP Financial Reporting Framework.

The Not-for-Profit Project Advisory Panel met on 18 February 2021. Feedback was collated and incorporated in the scope of a staff paper, which was then put to the AASB Board for consideration at its February meeting.

The AASB Board is forming a view on the aspects that will be included in the consultation report which is anticipated for release by the end of 2021 for public feedback. The ATO can arrange an out-of-session briefing for interested NFPSG members.

Improving ATO digital experiences for the not-for-profit sector

The ATO recently engaged EY Sweeney to conduct research into Improving ATO digital experiences and communications for the not-for-profit sector. We encourage you and those in your networks to have your say, by completing a digital experience research survey.

Please circulate the EY Sweeney survey through your network. The greater the number of participants and observations that can be collected, the greater the potential to create an improved digital experience for not-for-profits into the future.

The survey should take less than 15 minutes to complete and closes at 5.00pm Sunday 28 March. Feedback will be kept confidential, with only aggregated results provided to the ATO.

Online services for business (OSB)

Public beta testing for OSB commenced in January 2021. This means it is live, and not-for-profits can now make the move to OSB.

OSB is a modern channel that will replace the Business Portal and can be used to create payment plans, lodge a business activity statement, obtain copies of income tax returns and view communication history with us. Not-for-profits can also use the 'Switch ABN' to move between the organisations you manage with a single login.

Find out more by visiting at Try our new Online services for business.

Treasury update

National redress scheme

The Australian Charities and Not-for-profits Commission Amendment (2021 Measures No 1) Regulations 2021 came into effect on 25 February 2021.

Governance Standard 6 requires a registered charity to take reasonable steps to become a participating non-government institution if the charity is, or is likely to be, identified as being involved in the abuse of a person:

  • in an application for redress made under section 19 of the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Redress Act), or
  • in information given in response to a request from the National Redress Scheme Operator (the Secretary of the Department of Social Services) under section 24 or 25 of the Redress Act.

Religious institutions will not be eligible to be classified as a basic religious charity if they have been named in an application but have not joined the scheme for six months. A majority of the registered charities have either joined or indicated their intention to join the redress scheme.

Reform for deductible gift recipient (DGR) charities

The Treasury Laws Amendment (2021 Measures No 2) Bill 2021 was introduced to parliament on 17 March 2021. If passed into law, the amendments will require non-government DGRs to register as a charity with the Australian Charities and Not-for-profits Commission (ACNC). The new requirements will commence three months after receiving Royal Assent. A transitional period is proposed for existing DGRs to take the necessary steps to become registered as a charity. This measure will not apply to ancillary funds or DGRs specifically listed in tax law. For more information, visit Deductible gift recipient reform.

Eligible entities who are unable to achieve registration during the transitional period will be able to apply to the Commissioner of Taxation for a time limited exemption which runs for an additional three years to achieve charity registration.

Consultation will be held on a draft legislative instrument in April. It prescribes the criteria and matters that the Commissioner must consider when considering applications for the time limited exemption.

Increasing harmonisation financial recording threshold for ACNC registered charities

The public consultation on the proposal from the Commonwealth and State and Territory Treasurers to increase the financial reporting threshold closed on 21 March 2021.

Financial reporting thresholds are not currently harmonised across the jurisdictions. The proposal aims to reduce regulatory burden on incorporated associations registered with the ACNC and reset reporting requirements based upon updated annual revenue thresholds of:

  • less than $500,000 for small charities
  • $500,000 to $3 million for medium sized charities
  • $3 million or more for large charities.

By the conclusion of the consultation period, Treasury had received 90 responses to the survey and a small number of written submissions. Two targeted consultation sessions were held, in which participants expressed broad support for the reform in general.

It is expected that Commonwealth, State and Territory Treasurers will make an announcement about the new thresholds and indicative timeframes for implementation around mid-2021.

Unlawful activity – changes to governance standards for registered charities

A four-week consultation period was held between 16 February and 14 March on the exposure draft legislation that will expand the scope of impermissible activities that registered charities must not engage in (Governance Standard 3).

This includes certain summary offenses such as trespass, damage and threatening violence. It would also require charities to take steps to ensure their resources are not promoting unlawful activities.

Treasury received 65 submissions during the consultation period, which have been analysed. Two concerns expressed in the submissions included:

  • The breadth of current offences may cast a wider net then intended.
  • The steps a charity must take to protect its resources from misuse in promoting unlawful activities are not practical and are unreasonable.

Treasury will engage the Assistant Treasurer on the potential options to address feedback raised. It is a matter for government to decide if a refined or targeted confidential consultation will be held.

Members’ comments

Members requested their involvement in the targeted consultation for Governance Standard 3 . Members were encouraged to email an expression of interest to the NFPSG Secretariat or to Treasury directly.

ACNC update

Annual financial report disclosures

In late December 2020, a best practice guide was published for charities that prepare annual financial reports, with the purpose of recognising government sourced funding to charities. To help charities provide information that is useful, informative and consistent, and to encourage transparency and accountability, the ACNC recommends the following disclosures of government funding:

  • Disclose total revenue from all levels and information about the sources of government revenue. Where a charity received 10% or more of its total revenue from government, it should disclose information about the sources of its government revenue, up to the top 10. This would include names of departments and the amount received, and the revenue from providing goods and services to beneficiaries who receive related government financial assistance (for example, funding from the National Disability Insurance Scheme).
  • Disclose economic dependency on government revenue in its financial statements.
  • Disclose funding received from government but not yet recognised as revenue. For a charity that prepares Special Purpose Financial Statements and does not make the disclosures required by AASB Standard 15 Revenue from Contracts with Customers and AASB Standard 1058 Income of Not-for-Profit Entities, the ACNC recommends disclosing funding that has been received but not yet recognised as revenue.

Annual Information Statement

Charities reporting as a group can submit Annual Information Statements on the extended due date of 31 March 2021, if their reporting year ends between 30 June to 29 September 2020.

Charities can request a reporting period change, via the ACNC Charity Portal.

Members’ comments

Members would like a better understanding of the driver behind the best practice disclosures for government funding in an annual financial report.

Questions were raised regarding the need for the disclosures and queried if it is premised upon public interest or government interest.

Members indicated that this places extra regulatory burden on the not-for-profit sector.

Members suggested that there may be merit in ACNC commissioning research into the level and types of information sought by donors.

Current environment update

A round table discussion was held for members to share their insights and consider questions raised by other members.

  • Observations were made from the recent Australian Institute of Company Directors 2020 NFP Governance and Performance Study: The COVID-19 Edition. It outlines a range of COVID-19 impacts on the sector, including
    • Significant disparities in the strength of NFPs to withstand the challenges of the crisis, with a fair amount of luck involved in how charities faired
    • Luck seems dependent upon the season an organisation was in. For example, if an organisation was about to start or finish a sporting season or festival, or if a major fundraising campaign was completed prior to COVID-19. Many sub-sectors had to go into hibernation for a specific period of time.
    • Arts, Sport, Health and Aged Care sub-sectors saw greater financial impacts, although the picture for the sector is complex. Some organisations posted record years of profitability, while a majority of others posted the worst year on record. Some of these charities were also facing considerable financial pressures before COVID-19.
    • Sources of funding played a role. While organisations may have received government funding or a grant to help through the crisis, this has not fixed systemic structural issues. These issues will become apparent for organisations again, post COVID-19.
    • Financial stability, building reserves and restoring balance sheets is a major focus over the next few years to position organisations to survive the next crisis. The question is where will income streams come from?
  • Many members echoed the key point about charities being in financial stress pre COVID-19, and that similar financial stresses will be felt post COVID-19. The starting point for many charities was also not ideal, given many had just come out of the worst fundraising year after the Bushfire disaster.
  • The pandemic has highlighted a growing inequality in Australia, and these fault lines are extending to charities. Many increased wealth, while others have been left behind. NFPs that adapted to digital methods and other ways of fundraising have benefited, while smaller face-to-face or remote charities struggled due to a lack of access to these reserves.
  • Large importance will be placed on budgeting. While this is accounting 101, the need will be highlighted as charities come out of the financial stresses of COVID-19 and negotiate their future path.
  • There is a general sense of fatigue across the sector. This is particularly so for NFPs in locations that had higher COVID-19 restrictions, those contending with technology and those navigating an environment of regulatory change. Those in Victoria, with some noted in Queensland, seem to be feeling these impacts more than others, both emotionally and physically. They will need to be diligent in managing their resources moving forward.

Insights from a recent Philanthropy Australia survey provided anecdotal evidence that the sector responded well to COVID-19, and that Australians are generally engaging with NFPs. Insights are being sought as to the longer-term impacts on giving.

  • There had been previous forecasts of a collapse in giving. Has there been?
  • Will the end of JobKeeper show dynamic changes?
  • How has COVID-19 impacted giving levels in Australia?
  • While a crisis usually generates increased levels of giving, thereafter it generally drops away.
  • Insights may be forthcoming in the next ACNC Report.
  • On 22–23 April a blueprint for giving in Australia will be lunched at the Philanthropy Australia National Conference, which sets out the ways that government and others can structure giving by 2030.
  • There is yet to be a reckoning on the role of volunteers, with a number of issues converging, creating pressure for many organisations
    • Seventy percent of volunteers have cut-back on volunteering, while others have not returned at all. Issues with access to vaccines are playing a role.
    • There is an increased demand in critical areas, such as mental health, family services, refugees and student support. However, specialist staff resources have diminished.
    • The aged care sector has lost a large number of volunteers, which will have a big impact on the welfare of those that are in care.
    • Disability service providers also had a large increase in the demand for services, more than ever before.
    • The future outlook is predicted to have increasingly limited funding available for NFPs, particularly as the budget becomes more critical for Government. The focus for charities will be on how to respond to the increasing needs of marginalised people.
  • The impacts on clubs is dependent upon their location.
    • Recently, those more heavily affected have been reliant on tourism or live entertainment. Some clubs are still subject to dancing and social distancing restrictions, which are still yet to ease in the Northern Rivers region of NSW.
    • Shutdown impacts are still present in the sector with many having burnt through reserves and in the process of accumulating cash to avoid insolvency.
    • The temporary relief against trading while insolvent, provided through the amendments to the Corporations Act helped some clubs get through the period. However, with the expiration of the temporary amendments at the end of 2020, some clubs are at risk of becoming insolvent and closing.
    • Clubs also found the Australian Securities and Investments Commission no-action position and temporary determination by the Treasurer useful as it enabled virtual annual general meetings and sending of electronic members’ meeting notices. The viability of the club's sector will likely be determined by community transmission of COVID-19 and associated restrictions in public health orders.
    • Recent amendments to the Fair Work Act 2009 have assisted many clubs, with clearer definitions around classifying casual employees.
    • Many clubs are vulnerable to the closure of borders, both internationally and domestically. Some clubs in the Riverina region of NSW were required to close when the NSW-VIC border was shut, as 50-95% of their patrons lived on the other side of the border.
  • There was broad agreement around the weight that workforce issues, changes to operating models and the volume of regulatory change is having on not-for-profits.
    • Charities have had to alter their service delivery model and learn to take-up digital technology throughout COVID-19. Virtual meetings are becoming more prominent and there are many benefits, but with some practical issues.
    • There are numerous Royal Commissions across the sector, including for aged care and for the bushfire disaster, while the sector is still looking for the regulatory reforms to be implemented that would support the sector.
    • The sector is eagerly awaiting consultation on director duties and the implementation of promised DGR reforms – such as DGRs to register as charities, abolishing public funds and migrating DGR registers to ATO and ACNC. These reforms will make a large difference to the sector.
    • There is a lot of work required of organisations needing to implement recommendations from the Royal Commission into Aged Care Quality and Safety, particularly those that may not have these elements in practice now.
    • There are significant time costs involved in managing regulatory changes. Providing adequate timeframes for consultation is essential for the sector to consider all impacts and raise these matters; ultimately ensuring the best outcome is achieved for the reform. If it becomes unmanageable, there is a risk people will walk away from the sector.
    • Regulators need to consider the volume of change when making decisions on new reforms. The sector needs to see the intent behind government decisions for regulatory change, due to downstream impacts.
    • The JobKeeper consultation with Treasury and the ATO should be used as a base model for future consultations. It enabled us to concentrate on an issue, talk it through and make informed contributions.
    • Regulatory changes are contributing to fatigue and exhaustion felt in the sector, such as those for ACNC Governance Standard 3.
    • The sector is calling for more certainty that the ACNC requires the new level of information and financial reporting disclosures requested of registered charities.
  • The ATO was recognised for the work being undertaken to simplify key products.
    • It is good to use the purpose of a product to drive simplification – to ensure the product is as simple as it can be to reduce red tape burden.
    • Ruling requests should be the exception rather than the default, due to the time costs for both parties. The information should just be available to guide application and outline what NFPs need to do to get it right. Communicate simply. For example, can simplified guidance be made available around the donation of property and valuation rules?
    • Consider if legislative reform is really needed. Or, can a simplified tool provide the guidance required? If so, make it as useful and user-friendly as possible. The sector wants to see genuine attempts to make it easier to comply.
  • Other member observations included
    • The effort the ATO team puts into tailoring communications for NFPs is appreciated and very useful to pick up and circulate key messages across our network.
    • Arnold Bloch Leibler has been receiving a number of instruction requests to set-up new private and public ancillary funds. This is an encouraging sign for the sector, after a quieter period was observed in establishing these funds during COVID-19.
    • Some NFPs are taking advantage of the current quieter period to update their constitutions.
    • The positive take-up of Single Touch Payroll across the sector was noted. One key challenge has been working through errors, including FBT information omitted from reports and the ramifications in remedying the error.
    • There should be a review of the not-for-profit definition across jurisdictions, as there is significant mismatch and inconsistency across government agencies and reporting frameworks.
    • The Tax Institute is seeking to harmonise the definition of charities across jurisdictions to avoid inconsistencies across states and territories.
    • There are a couple of accounting standards causing issues for larger NFPs. In particular, recognition of income and revenue for 2021–22 financial year end, including grant income. Additional guidance is required to support these organisations. AASB are looking to provide this.
    • Since COVID-19, there has been an increased interest of setting-up NFP organisations to address housing issues.

Member’s comments

The sector is looking forward to Single Touch Payroll Phase 2, with initial errors addressed.

Other business

Assistant Commissioner Jennifer Moltisanti discussed other business.

Due to COVID restrictions, face-to-face stewardship group meetings may be held in the latter half of 2021. This format may be a possibility for our scheduled November meeting.

Following on from the design sessions held in 2019 prior to COVID-19, we are proposing a virtual design session to be held in an extraordinary meeting in June. The focus will be on reducing red tape with a view to identifying opportunities to simplify the system and inform the development of a roadmap for the NFP sector. We will look to continue these collaborations with interested members throughout 2021 and beyond, to co-design the products and services that will make up the forward work plan.

Members were encouraged to reach out to seek support if they, or organisations in their network, were struggling due to recent floods in NSW and QLD.

Meeting close

Co-chair Tim Dyce thanked the group for their input.


Attendees list




Tim Dyce (Co-chair), Private Wealth


Frances Gobel, Private Wealth


Gary Issar, Private Wealth


Jennifer Moltisanti, Private Wealth


Joy Tillman, Private Wealth


Kathrina Weinhonig (Secretariat Support), Enterprise Strategy and Design


Len Hertzman, Tax Counsel Network


Melinda Knight, Private Wealth


Prescilla Moses (Secretariat), Private Wealth


Rowan Fox, Policy, Analysis and Legislation

Arnold Bloch Leibler

Joey Borensztajn

Australian Charities and Not-for-profit Commission

Anna Longley

Australian Council for International Development

Joe Zabar

Australian Federation of Disability Organisations

Ross Joyce

Australian Institute of Company Directors

Phil Butler

Clubs Australia

Simon Sawday

Community Council for Australia

David Crosbie

CPA Australia

Ram Subramanian


Nunzio Giunta

Judy Sullivan Consulting

Judy Sullivan

Justice Connect

Sue Woodward

Law Council of Australia

Jennifer Batrouney

Prolegis Lawyers

Anne Robinson

Prolegis Lawyers

Jae Yang

Swinburne University of Technology

Krystian Seibert

The Salvation Army Australia

John McIntosh (Co-chair)

The Tax Institute

Bridgid Cowling


Michael Atfield

University of New South Wales Business School

Fiona Martin


Apologies list




Jacky Rowbotham