What type of NFP is your organisation?

There are two types of NFPs. These are charities and other NFPs. Depending on the type of NFP, your organisation may be eligible for a range of tax concessions.

NFP organisations (including charities) operate in many areas of society. They can include:

• church schools
• churches
• community child care centres
• cultural organisations
• environmental protection organisations
• neighbourhood associations
• public museums and libraries
• scholarship funds
• scientific organisations
• scouts
• sports clubs
• surf lifesaving clubs
• traditional service clubs.

First, you should work out whether your organisation qualifies as an NFP.

Is your organisation an NFP?

It is expected that organisations seeking access to tax concessions (by endorsement or self-assessment) will have governing documents.

An NFP's governing documents are the formal documents that set out:

• the organisation's purpose
• the organisations not-for-profit character
• the way the organisation is governed, operates and makes decisions.

Your organisation’s governing documents may be called its:

• rules or articles of association
• constitution
• rule book
• deed of trust.

We will accept your organisation as an NFP if these governing documents prevent you from distributing profits or assets for the benefit of specific people - both while it operates and when it winds up.

Your organisation should have sufficient controls in place to ensure that members and other private persons do not receive the property or assets of the organisation (other than as reimbursement for services they have provided or for expenses incurred on behalf of the organisation)

These documents should contain clauses that are acceptable to us as showing the organisation's NFP character.

Is your organisation a charity?

Generally, charities are eligible for more concessions than other NFPs.

To be a charity, your organisation must:

• be a not-for-profit
• have a charitable purpose
• be for the public benefit (other than where the charitable purpose is the relief of poverty).

Examples of charities include:

• religious groups
• not-for-profit aged care homes
• homeless shelters
• disability service organisations
• universities and colleges
• animal welfare organisations and
• artistic or cultural groups.

Charities can be further broken down into the following types:

• public benevolent institutions (PBIs)
• health promotion charities (HPCs)
• other charities.

PBIs and HPCs receive wider tax concessions than other charities.

Next steps:

• What tax concessions are available?
• Public benevolent institution?
• Health Promotion Charity

See also:

• Is your not-for-profit a charity?
• Religious institutions: access to tax concessions
• acnc.gov.auExternal Link

Other NFPs that are not charities

NFP organisations that are not charities are able to self-assess whether they are entitled to certain tax concessions, such as income tax exemption.

Examples NFP organisations that are not charities are:

• most sporting and recreational clubs
• community service organisations
• professional and business associations
• social organisations.

If your organisation is able to self-assess, it does not need to be endorsed by us to access the concession.

Many NFP organisations are taxable, but may be entitled to special rules for calculating taxable income, lodging income tax returns and special rates of tax.

Next steps:

• What tax concessions are available?
• Do you have to pay income tax?

A not-for-profit organisation operates for its purpose and not for the profit or gain (either direct or indirect) of its individual members. This applies both while the organisation is operating and when it winds up.