Endangered NFPs to gain from Deakin’s reporting tool
Deakin University has partnered with Neighbourhood Houses to develop an online platform designed to prepare not-for-profits for coming reporting reforms.
A new digital tool will help not-for-profits justify their tax-exempt status once the government's divisive new reporting requirements are rolled out mid-year.
From July, more than 150,000 non-charitable not-for-profits (NFPs) will be required to lodge an annual self-review return to the ATO demonstrating how they meet the legislated criteria of a tax-exempt organisation.
Developed in partnership with the Australian Neighbourhood Houses and Centres Association, Deakin University’s new digital tool will step community groups through the new mandatory compliance activity.
The tool has been rolled out to over 1,000 entities and Deakin is in talks with local councils and industry associations to continue the expansion.
“It is critical that we can provide appropriate support to these groups as they grapple with the administrative reforms, because if we don't, the potential losses are huge,” said Cameron MacRae, chief operating officer at Neighbourhood Houses.
“Each of these community organisations rely on an income tax exemption to be financially viable and deliver their important work, and many are run by a team of volunteers with little to no legal or accounting experience,” he added.
MacRae, a juris doctor student at Deakin Law School, approached the university for help after learning the changes were a “ticking time bomb” for many NFPs.
While the reforms were first announced in 2021, the requirements were shrouded in mystery for some time.
In February, HLB Mann Judd tax consulting partner Gaurav Chitnis told Accounting Times that many NFPs were afraid the obscure standards would call their tax exemptions into question.
“When you think about a sporting association or a cultural organisation, the work they do is really important out in the community and the last thing they want is to be worrying about having to pay tax on any surplus profits that they’re making,” he said.
MacRae said most of his member organisations had not considered their founding documents in the decades since many of them were written up.
“Almost all the documents we review do not meet the requirements set out under the new obligations, so it’s critical we act fast,” he said.
Deakin’s executive dean for the faculty of business and professor of law, Jenni Lightowlers, said the futures of thousands of community groups will be at risk if they fail to meet the new requirements.
“We want to empower them to develop a strong and sustainable path forward in a way that feels manageable,” she said.
