Humanity’s intrinsic sense of benevolence is often the primary motivator that inspires people to donate to, or even start up, Charities and Not-for-Profit organisations (‘NFPs’). There are many structuring options for entities seeking to provide benefit to the public – each differing in its reporting and regulatory obligations and eligibility for tax exemptions.

The bullseye model (below) is a useful conceptual tool when considering the regulatory requirements and taxation exemptions of particular types of not-for-profit entities. As one moves towards the centre of the bullseye, reporting obligations on the entity become more extensive – but as a tradeoff, the entity is eligible for greater tax concessions.

Those looking to set up a not-for-profit entity will inevitably arrive at the decision as to whether they wish to register their organisation as a charity with the Australian Charities and Not-for-Profits Commission (‘ACNC’). This article outlines what charitable status is, and some of the benefits obtainable by an entity if they are successful in registering their charity with the ACNC.

What is a “Charity Status”?

An organisation is colloquially said to obtain “charity status” upon its registration with the ACNC as a “charity”. The ACNC will apply the definition provided in section 5 of the Charities Act 2013 (Cth) (the ‘Charities Act’) in determining whether the entity seeking registration is in fact a “charity”.

An entity will be a “charity” and registrable with the ACNC if:

  1. It is a not-for-profit entity;
  2. All its purposes are “charitable purposes” that are for the public benefit – or are purposes that are incidental or ancillary to, and in furtherance or in aid of, the “charitable purposes” of the entity;
  3. The entity has no “disqualifying purposes”; and
  4. The entity is not an individual, political party or government entity.


1.Not for Profit

An entity will be not-for-profit where the organisation does not operate for profit, personal gain or other benefit to particular people – such as members or shareholders.[i] Whilst there are limited situations where the entity can provide benefit to a member, this must only occur in circumstances where the benefit is provided whilst the organisation is genuinely carrying out its purposes. A general prohibition on operating for the profit of members should be reflected in the charity’s governing document (such as its constitution or rules).

2. Charitable Purposes and “Public Benefit”

The entity must have exclusively charitable purposes or purposes that are incidental to the carrying out of charitable purposes. Such as the different types of relief that charities provide is highly diverse, so too are the different types of charitable purposes recognized by the ACNC and Charities Act. Overall, there are 14 different types of recognized charitable purposes, some of which include:

  • Advancing education;
  • Advancing religion;
  • Advancing health;
  • Promoting/protecting human rights;
  • Advancing human rights;
  • Advancing culture.

These purposes must also be of public benefit, and the purpose must direct a benefit to the general public or a sufficient section of the general public.[ii] It is unlikely that an organisation that passes on a benefit to a very small portion and demographic of the public will be registrable as a “charity”.

3. No “Disqualifying Purposes”

The organisation cannot be founded for a “disqualifying purpose” as defined by the Charities Act. This means it cannot operate for the purpose(s) of:

  • Engaging/promoting unlawful activities or activities against public policy; or
  • Promoting/opposing a political party or candidate.

Benefits of ACNC Registration

In most circumstances, ACNC registration is highly desirable for charities due to the abundance of benefits it provides. The types of benefits available to a charity will depend on the charity’s designated “subtype”, and might include:[iii]

1) Taxation Benefits:

  • The ability to apply to the Australian Taxation Office (‘ATO’) for tax concessions/exemptions (such as income tax exemptions and GST concessions) and particular kinds of deductible gift recipient (‘DGR’) status available only to ACNC-registered charities;
  • For Public Benevolent Institutions, Health Promotion Charities or charities for the advancement of religion – further tax benefits available only to these types of institutions;
  • Potential eligibility for further financial benefits and tax exemptions provided under Commonwealth law, such as:
    • Mobility allowances;
    • Family tax benefits or double orphan pensions;
    • Fringe benefit tax exemptions.

2) Regulatory benefits (where the entity is also registered with the Australian Securities and Investments Commission (‘ASIC’) and is a Company Limited by Guarantee):

  • Reporting is required only to the ACNC instead of both the ACNC and ASIC, meaning that ASIC filing and annual review fees are not payable and the need for a directors’ report to be prepared (which can reduce costs in the event of an audit) is no longer applicable;
  • The ACNC also assesses reporting size thresholds based upon revenue only (without consideration of DGR status), meaning an entity that may have been classified as a “medium” sized entity under the Corporations Act 2001 (Cth) and would have hence required audit and review might instead be classified as “small” under the Australian Charities and Not-for-profits Commission Act 2012 (Cth) and therefore not required to undertake audit or review.

3) Other benefits

The ability to publicly display registration publicly and provide your details on the ACNC website, which can assist in attracting potential partners and donations for the charity.

If you are looking to register your not-for-profit entity with the ACNC and to maximise the taxation and other benefits available to your organisation, the Not-for-Profit and Charity team at Corney & Lind Lawyers can help. Our experienced lawyers can assist you in all aspects of the process – from structuring and setting up your entity through to ACNC registration and preparation of taxation concession applications. Give our team a call on (07) 3252 0011 or email us at

This article was written by Jackson Litzow 

[i] Australian Charities and Not-for-profits Commission, ‘Benefits of Registration’, Why Register (Webpage, 7 September 2022) <>.

[ii] Australian Charities and Not-for-profits Commission, ‘What is ‘public benefit’’, Public Benefit (Webpage, 3 November 2022) <

[iii] Australian Charities and Not-for-profits Commission, ‘What is a not-for-profit’, NOT-FOR-PROFIT (Webpage, 7 September 2022)