Charities and Not-For-Profits

Overview

Charities and not‑for‑profit organisations operate under public trust and are subject to regulatory frameworks that impose obligations their commercial counterparts do not face. Charitable status, DGR endorsement, ACNC registration and fundraising requirements are conditions of operation, not optional features. In addition to regulatory accountability many face constant scrutiny from donors and beneficiaries.

Thomsons advises national charities, hospitals and health care providers, medical research institutes, community housing providers, religious and faith-based organisations, philanthropic trusts and foundations, educational institutions, aged care and disability service providers, arts organisations, peak bodies and sports associations. The legal issues these organisations face are not uniform – they depend on structure, funding sources, scale and the regulatory environment in which they operate. Thomsons advises across the full range.

Areas of expertise

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Registration with the ACNC, maintenance of charity subtype, compliance with the governance standards and the annual information statement are conditions of charitable status. Loss of registration - or failure to maintain a specific subtype - affects tax concessions, DGR endorsement and, in some cases, the ability to operate. Thomsons advises on registration, regulatory engagement with the ACNC and the governance arrangements required to remain compliant.

Deductible gift recipient status determines whether donors can claim tax deductions. Different DGR categories carry different requirements, and endorsement in one category does not extend to activities outside it. Income tax exemption, FBT concessions and GST treatment for charities are each governed by separate regimes. Thomsons advises on the conditions of DGR endorsement, the tax treatment of specific transactions and the structuring of arrangements to preserve concessions.

Not-for-profit boards carry legal duties under the ACNC Act, the Corporations Act where the organisation is an ASIC-registered company, and state incorporated associations legislation. The standard expected of directors and officers has increased. Thomsons advises on governance frameworks, conflict of interest management, related party transactions, whistleblower obligations and the conduct of board reviews and investigations.

Charitable fundraising is regulated separately in each state and territory. Licensing requirements, financial reporting obligations and restrictions on fundraising methods vary by jurisdiction. Organisations fundraising nationally must comply across multiple regimes simultaneously. Thomsons advises on fundraising compliance, licensing applications and the specific obligations that apply to online and digital fundraising.

Mergers, amalgamations, affiliations and restructures are increasingly common as organisations respond to funding pressure, regulatory change and the efficiencies available from consolidation. The process involves reviewing constitutions and trust deeds, obtaining member and regulatory consent, addressing property and employment transfers, and managing the tax consequences of structural change. Thomsons advises through all phases.

Organisations that pursue charitable purposes through commercial activity including social enterprises, benefit corporations and hybrid charitable/for-profit structures must ensure that commercial operations do not compromise charitable status or tax concessions. Thomsons advises on the design of structures that achieve both mission and financial sustainability, and on the ongoing governance required to maintain the boundary between charitable and non-charitable activities.

Government grants and service contracts are a primary funding source for many not-for-profits. The conditions attached to Commonwealth and state funding such as reporting, acquittal, probity, and program delivery requirements impose obligations that require active management. Thomsons advises on grant agreements, service contracts and the specific conditions that attach to funding from agencies including the NDIS, housing authorities and community services departments.

Our experience

Calvary Health Care ACT – Compulsory acquisition

Acted for Calvary in relation to various aspects regarding the compulsory acquisition of Calvary Bruce Public Hospital by the ACT Government.

The Salvation Army – Corporate restructure

Acted for the Salvation Army property trust entities on its corporate structure, necessitated as a result of the introduction of a new Aged Care Act. Advised on the restructure of 6 Salvation Army property trusts, each of which were approved providers (under the Aged Care Act) and owned and operated various aged care facilities and provided home care services.

Mercy Aged Care – Aged care facility acquisitions

Acted for Mercy Aged and Community Care Ltd and Mercy Health Property Ltd on the acquisition of two aged care facilities and associated land in Victoria. Undertook due diligence of the assets and properties, negotiated the transaction documents, prepared the completion documents and worked with the clients to complete the transaction.

Child and family welfare NFP – Employment and safety law advice

Advising on all aspects of employment, workplace relations and safety law, both day-to-day and strategic.

Ingham Institute of Applied Medical Research – University collaboration

Advised IIAMR on its collaboration with the University of New South Wales, Western Sydney University and South Western Sydney Local Health District to establish the Ingham Institute Macarthur. Drafted and negotiated the collaboration agreement, and provided advice to IIAMR on key issues and requirements for funding under the NSW government's Medical Research Support Program.

Murrumbidgee Health & Knowledge Precinct – Corporate structure and governance

Acting for the Murrumbidgee Health & Knowledge Precinct on its corporate structure and governance arrangements. Advising on the structure options and governance arrangements for the Precinct, a collaborative initiative between government, universities and not-for-profit entities to deliver healthcare services and improve health outcomes for people of the Murrumbidgee community.

South Australian Housing Trust – Commercial arrangements, funding, compliance

Advising the South Australian Housing Trust, the primary provider of public and community housing in South Australia, on an ongoing basis across its commercial arrangements, funding structures and regulatory compliance obligations.

Link Wentworth – Affordable home delivery

Acting for Link Wentworth, one of Australia's largest community housing providers, on property transactions, development agreements and the legal structures that underpin delivery of social and affordable housing in New South Wales.

Prostate Cancer Foundation of Australia – Office lease

Advised the Prostate Cancer Foundation of Australia on the negotiation and execution of its office premises lease, including review of lease documentation and management of a complex landlord engagement process.

National charities – Governance restructuring

Advising multiple national charities on governance restructures to align with ACNC expectations, including constitutional amendments, board composition changes and the development of accountability frameworks for large multi-entity structures.

Ancillary funds – Compliance and governance

Acting for private and public ancillary funds on trust deed compliance, DGR conditions, intergenerational governance arrangements and the tax treatment of investments and distributions.

Faith-based organisations – Legal structures

Advising faith-based organisations on the legal structure of their charitable, educational and social services activities including the relationship between the religious body and separately incorporated entities operating schools, hospitals and community services.

Social enterprises – Hybrid structure design

Advising social enterprises on the design of hybrid structures that incorporate both charitable and commercial elements, including constitutions, related-entity arrangements and ongoing compliance with ACNC governance standards.

Overview

Areas of expertise

ACNC compliance and charitable status

DGR endorsement and tax concessions

Governance and board accountability

Fundraising regulation

Structural and constitutional reform

Social enterprise and hybrid structures

Government grants and procurement

Our experience