From this upcoming financial year, new charity reporting reforms proposed by the Australian Charities and Not-for-profits Commission’s (‘ACNC’) Legislation Review (‘the Review’) and approved by the Government will come into force.

Such reforms decrease the reporting obligations imposed on over 5,000 small and medium charities registered with the ACNC.


How does this affect my charity and reporting obligations?

From 1 July 2022, small and medium charities registered with the ACNC will have their financial reporting annual revenue threshold increased.

Small charities with less than $500,000 annual revenue will no longer be required to produce reviewed financial statements.

Medium-sized charities with under $3 million annual revenue will no longer be required to produce audited financial statements.

The ACNC claims that this will lead to nearly 2,500 small charities saving around $2,400 and even more medium-sized charities saving around $3,000 in accounting expenses annually.

The intended result? According to Assistant Treasurer, Michael Sukhar, the reforms aim to assist charities ‘redirect their resources to help vulnerable Australians’.

These reforms do not lift the obligation imposed on all registered charities to complete an Annual Information Statement each year.


Is my charity small, medium or large?

The size of a charity is based on annual revenue for the reporting period:

Charity classification Annual revenue ($) (Current) Annual revenue ($) (from 1 July 2022)
Small < 250,000 < 500,000
Medium 250,000 > 999,999 500,000 > 2,999,999
Large 1,000,000 + 3,000,000 +


Enhanced reporting for greater accountability

In response to further recommendations resulting from the Review, the Government has also announced an increase in reporting obligations imposed on large charities to require superior disclosure to donors, beneficiaries and the public.

From 1 July 2022, large charities with two or more key management personnel will be required to report remuneration paid to responsible persons (directors) and senior executives on an aggregated basis in their Annual Information Statements.

Additionally, reforms will be implemented to lessen the risks of conflict-of-interest transactions occurring without stakeholder awareness. From 1 July 2023, all charities will have to disclose related party transactions in their annual reporting to the ACNC.

With the aim to ensure that the charity sector easily understands and adheres to the incoming reforms and reporting requirements, the ACNC has pledged its commitment in working with the sector to develop helpful guidance and education resources.


Disclosure of political expenditure

The reforms do not only impose obligations on Australian charities but also on the ACNC itself.

Once in force, the amended regulations (to the Australian Charities and Not-for-profits Commission Regulation 2013) will require the ACNC Commissioner to publish and maintain information on the Charity Register. Information to be published must contain details (or provide sources) to inform of the electoral expenditure and political donations of registered charities.

To adhere to this new requirement, from 20 July 2021, the Charity Register will contain links of affected registered charities to the Australian Electoral Commission’s Transparency Register that disclose details of political donations and electoral expenditure.


What is electoral expenditure?

Electoral expenditure means expenditure incurred for the dominant purpose of creating or communicating electoral matter.

Electoral matters and those that are communicated or intended to be communicated for the purpose of influencing elector voting in a federal election.


For more advice on charity or not-for-profit law please contact a member of our Charities Team.