Our operating environment shapes our ability to promote public trust and confidence in charities.
Local and global issues faced by charities can affect their ability to meet their legislative obligations to the ACNC. A range of government policies and reforms (including Australian Public Sector reforms) may also affect our ability to achieve our purpose.
Self-assessing income tax exempt reforms for the not‑for-profit sector
From 1 July 2024, around 157,000 not-for-profits (NFPs) will be required to submit an annual return to the ATO to maintain income tax exemption. We expect to receive a significant volume of enquiries from NFPs due to this reform. Some NFPs will require ACNC registration to maintain income tax exemption.
The number of organisations that will require ACNC registration is unknown, but this reform may affect our ability to register new charities in a timely manner. For example, if only 5% of these NFPs apply for ACNC registration, this will represent 2 to 3 years worth of registration work for the ACNC.
We are committed to working with the ATO to assist NFPs affected by this measure. We will promote our self-assessment tool, helping NFPs to identify whether they are charitable. We are also working with NFP peak bodies to ensure new applications are ’grouped’ to help streamline their assessment and, with support from the ATO, have engaged some additional staff.
Potential reforms that the ACNC may need to implement
The ACNC may need to implement reforms associated with:
- the Productivity Commission’s inquiry into Philanthropy
- the Department of Social Services’ Blueprint Expert Reference Group.
We are committed to sharing our data and insights to ensure that the impacts of potential reforms are clearly understood. We will work with government (including Treasury) to implement any reforms. We will support affected charities by providing guidance and sharing information, including with our consultation and advisory forums.
Australian Public Service (APS) reforms and the Data and Digital Government Strategy
APS reforms and the Australian Government’s Data and Digital Government Strategy are likely to affect our staff and the delivery of our services.
We will maintain a fit-for-purpose workforce plan that ensures we recruit people with the right skills. We will leverage new technology while ensuring that appropriate guardrails are adhered to. This will allow us to deliver better outcomes to the charity sector and public.
Continued cost-of-living pressures affecting charities
Charities continue to be affected by higher costs of goods and services, which can place strains on charity income and expenses. Donations and volunteering may also decrease as a result of personal financial pressures.
Charities will continue to be affected by:
- increasing demand among people experiencing vulnerability, who turn to charities for help when impacted by cost-of-living pressures
- increasing operating costs, including insurance premium increases and higher employee expenses associated with a tight labour market and the need to retain existing employees
- recruiting, supporting, and retaining volunteers when the number of volunteers remains below pre-COVID levels.
Charities need to manage these pressures alongside their obligations to funders (including government), members and beneficiaries.
We help the public and charities by continuing to promote the Charity Register, ensuring there is an easy method to find a registered charity in Australia. Charities can use the Charity Register to find like‑minded organisations to work with. We also support charities by minimising any unnecessary regulatory burden, allowing them to focus on helping those in need.
Cybersecurity and privacy risks facing the charity sector
As well as the cost of protecting data and information, cybersecurity and privacy risks can present challenges, particularly for the small volunteer‑run organisations that make up around half of Australia’s registered charities.
Charities, including those that are small, often hold personal information on beneficiaries and donors, and it is important for charities to protect themselves from cyber-risks and manage cybersecurity incidents.
We will update our guidance based on our cybersecurity compliance reviews to help charities to improve their governance.
We will continue to support charities by encouraging them to be cyber-aware and share useful guidance.
The cumulative impact and pace of regulatory reform and initiatives on charities
The concurrent regulatory reforms occurring across all levels of government impact the charity sector. The number and pace of these reforms have a significant impact on charities, half of which are volunteer run.