The Sydney to Hobart has been sailed, the Ashes won, the tennis is finally over for another year, the WAFL is in full swing, and a new crop of Australians of the Year announced.  The summer sport fest may have pushed the labyrinthic proposed changes to the law and regulation of charities and non-profit organisations into the bottom drawer of our mental filing cabinets, but it is time to consider what is and what could be on our plates for 2022.

Here is a list to jog your memory.

Queensland Incorporated Associations

New Regulations

In late November 2019, the Associations Incorporation and Other Legislation Amendment Bill 2019 was introduced into the Queensland Parliament, and some provisions were assented to on 22 June 2020.

The reserved provisions included specific duties and governance provisions for association officers, disclosure of material personal interests, disclose remuneration or benefits paid/given to management committee members and senior staff members, and their relatives, and a new provision will require the rules of an incorporated association to set out a grievance procedure, consistent with legislated, for dealing with any dispute under the association’s rules. If no suitable grievance procedure is included in an Association’s rules, then the rules of the association are taken to include the model rules providing the grievance procedure. An incorporated association will not be able to exclude the operation of this provision which is possible for other rules.

The OFT undertook to consult about the new model rules and regulations required to support the new amendments. However, the Pandemic has delayed consultation, and unless there is a legislative intervention, these will be required by 22 June 2022.

The OFT intend to commence the consultation process for certain aspects of the Regulation (thresholds, reporting exemptions, grievance procedure and disclosure of remuneration) early in the new year with at least an eight week period of discussion.

The late consultation and 22 June deadline will leave some incorporated associations that want to review and alter their rules, rather than have some provisions of the model rules imposed upon them in a difficult position.

In any case, it is highly advisable that a review your association’s rules is undertaken once the Act and new regulations come into force to check for inconsistencies.

For further details, see our article Queensland Associations Incorporation Act changes delayed.

Director Identification Number

Director Identification Numbers (DIN) is a unique identifier that an individual will apply for once and keep forever and will mainly be required by company directors. However, those incorporated association committee members of associations registered with ASIC as having an Australian Registered Body Numbers (ARBN) will also be required to have a DIN. An ARBN allows your incorporated association to operate outside of your “home” state or territory and is often neglected by incorporated associations.

We can assist your association to determine whether your association is required to have an ARBN and hence committee members a DIN.

For further details Director Identification Numbers: What you need to do and when.

ACNC Charities

2022 Annual Information Statement

From 1 July 2022, for the purposes of reporting for the 2021-22 financial year, financial reporting thresholds for ACNC-registered charities will be raised as follows:

  • Small charities – charities with annual revenue of less than $500,000 will no longer be required to submit to the ACNC reviewed financial statements as part of the Annual Information Statement (AIS) process. To date, ‘small charities’ were only those with annual revenue of less than $250,000.
  • Medium charities – charities with annual revenue of between $500,000 and $3 million will be required to submit to the ACNC reviewed financial statements as part of the AIS process. To date, ‘medium charities’ were those with annual revenue of between $250,000 and $1 million.
  • Large charities – charities with annual revenue of $3 million or more will be required to submit to the ACNC audited financial statements as part of the AIS process. To date, ‘large charities’ were those with annual revenue of $1 million or more.

Basic religious charities (whatever their size) will remain exempt from the requirement to file financial reports.

From 1 July 2022:

  • large charities (annual revenue of $3 million or more) with 2 or more key management personnel will be required to report on the remuneration paid (on an aggregated basis) to their responsible persons and to their senior executives on their 2022 AIS; and
  • all charities will be required to report related party transactions in their AIS.

Refer: https://ministers.treasury.gov.au/ministers/michael-sukkar-2019/media-releases/cutting-red-tape-charities

Deductible Gift Recipients need to register as a charity

Unless your organisation is already an ACNC registered charity, Deductible Gift Recipients (DGRs) will need to register as a charity with the ACNC or be operated by a registered charity. Affected existing DGRs such as cultural, environmental or overseas aid organisations will have until 14 December 2022 to register.

The new requirements do not apply to public and private ancillary funds.

For further details, see our article, DGRs to register as charities.

General Provisions

Whistleblowing

Large charitable companies with annual revenue $1M, not-for-profit public companies and some incorporated associations have been required since 1 January 2020 to have a compliant whistleblower policy. The Australian Securities and Investments Commission (ASIC) recently reviewed more than 100 whistleblower policies, including some charitable companies, and found the majority did not include all the information required under the Corporations Act.

This remains an area of focus for ASIC, and further reviews will be conducted.

For further details, see the ACNC’s guidance.

Pandemic meeting requirements

All charities, incorporated associations and not-for-profits companies should ensure that any virtual meetings are held in accordance with their governing document and legislative requirements and properly facilitate member participation. Given the ongoing nature of the pandemic, all organisations whose constitution does not expressly permit them to hold virtual meetings should consider amending their constitution.

Temporary amendments to the Corporations Act 2001 (Cth), which allows companies to use technology to hold member and director meetings, are planned to lapse on 1 April 2022.

Queensland incorporated associations can apply to the Office of Fair Trading Chief Executive to grant an extension to an association for holding its AGM.

ATO Self-assessment for not-for-profit organisations

The 2021 Budget announced that from 1 July 2023 those not for profits that self-assess their concessional status (community service organisation, sporting organisations and cultural organisations that are not charities) will be required to lodge an annual self-review return with the ATO. This is in response to Recommendation 24 of the ACNC Legislative Review 2018.

If you fall into this category, it would be a wise move to spend a bit of effort in this year’s self- assessment to ensure all is in place for the ATO. This would include matters such as ensuring your constitution has appropriate purpose and object clauses as well as non-profit and winding up clauses that meet ATO standards.

Refer https://paxton-hall.com.au/2021/11/did-you-miss-something-in-2021/

Fundraising Reform

The Commonwealth and States are working on a national fundraising framework. However, there is no time frame announced. No, this is not a spoof!

For further details: https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/morrison-government-puts-charity-fundraising-reform

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