The 31 October deadline to lodge the 2024–25 NFP self-review return is fast approaching. In the return, you need to identify which of the 8 categories best describes your organisation’s main purpose. The three most common categories are:
- community service
- cultural
- sporting.
Let’s take a closer look at each.
Community service organisations
Community service societies, associations or clubs are made up of people who come together for community service purposes. They have altruistic purposes and are established for the wellbeing and benefit of communities who have a particular need. Examples include traditional service clubs and senior citizen associations.
Organisations that have only charitable purposes for the public benefit are not eligible to self-assess as income tax exempt. They must be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) and receive our endorsement to access an income tax exemption.
The Open Doors club supports young people in the community
Amanda is the treasurer of the Open Doors club, whose main purpose is to improve the welfare of local young people and provide them with opportunities to network and interact socially.
Amanda is the authorised contact for Open Doors with the ATO, which means she can lodge Open Doors' NFP self-review return. She logs onto Online services for business and gets started. In the second question she is asked to choose the category that best reflects the main purpose of Open Doors.
Open Doors' main activities include running school leaver information sessions and career guidance services for youths. The club also regularly organises networking events and social excursions. They have monthly meetings to plan what activities they will undertake for the upcoming month.
Amanda identifies that they qualify for an income tax exemption under the Community services category because they do not have only charitable purposes. Open Doors' main purpose is to improve the welfare of young people, and it has an independent non-charitable purpose to provide social and networking opportunities for the young people that use the club.
End of exampleCultural organisations
Cultural organisations are NFP societies, associations or clubs established for the encouragement of art, literature or music, or for musical purposes.
Under this income tax exempt category, art includes drama, ballet, painting, architecture and sculpture. Literature includes written or printed works in English and in languages other than English. And music includes the performance of vocal or instrumental works.
Cultural NFPs make art, creativity and connection more accessible. From local indie theatre troupes to local galleries, symphony orchestras to music festivals, they go beyond just entertaining and aim to bring people together through shared experience.
If all your organisation's purposes are charitable and for the public benefit, your organisation cannot self-assess as income tax exempt under this category. Your organisation will need to be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) and receive our endorsement to access an income tax exemption.
This category does not include multicultural organisations, unless their main purpose is encouragement of art, literature or music, or for musical purposes.
The New Writers Club encourages literature
Helen established the not-for-profit New Writers Club to hold a weekly writing and feedback session. Each week, members are encouraged to workshop their writing with the group. They also hold a quarterly book club where the main focus is to socialise over food and drinks.
The club's main purpose is to encourage literature and provide a space for aspiring writers to get feedback and develop their skills. They also have an independent purpose promoting social interaction or recreation.
Helen is getting ready to lodge the New Writers Club's NFP self-review return using the self-help phone service. She starts by reviewing the questions in the return using the NFP self-review return question guide. She determines that they can self-assess as income tax exempt as a cultural organisation as the club encourages literature and has an independent non-charitable purpose promoting social interaction.
End of exampleSporting organisations
Sporting organisations are one of the largest NFP categories, and are societies, associations or clubs established for the encouragement of a game or sport, or animal racing.
The category includes athletic games or sports such as football and swimming, and non-athletic games such as chess and bridge.
Encouragement of a game or sport can also include sporting research or testing, such as developing referees and providing sporting facilities.
Riverside Baseball Club are in the local baseball competition
Riverside Baseball Club (RBC) is a NFP sporting association established to encourage people to play the sport of baseball. It's run by a committee of members actively involved in the sport, including Ichiro, their treasurer.
Some of its activities include:
- hosting regular baseball matches
- owning and maintaining a sporting facility
- participating in state and national-level competitions.
All money the club brings in from player fees and food sales is invested back into the club, the sporting facility and the costs of holding games.
Ichiro identifies that club meets the requirements for income tax exemption under the sporting category, including applying its income and assets solely for its sporting purpose.
End of example5 other categories eligible to self-assess
There are 5 other NFP categories that qualify for income tax exemption: educational, health, employment, resource development and scientific organisations.
If you're unsure which category your NFP falls under or whether it meets exemption requirements, check Types of income tax exempt organisations.
Lodging the return
You must check that your not-for-profit meets all the requirements to self-assess under the above categories. Make sure your organisation is not a charity, follows its governing rules and applies income and assets solely for the purpose for which it is established. It must also meet one of the 3 following tests:
- physical presence in Australia
- deductible gift recipient (DGR)
- prescribed by law.
Before you lodge, review the questions in the return using the NFP self-review return question guide to prepare your answers and ensure you have everything ready.
Then find out how to lodge at How to lodge the NFP self-review return.
Stay informed
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Or if you want to talk to someone about your NFP or its category, you can phone us on 1300 130 248 between 8 am and 6 pm, Monday to Friday.