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We look at several topics in this e-bulletin.

Firstly, for most charities, the due date for the ACNC’s Annual Information Statement is fast approaching. We also take a look at the recently released views by the ACNC on maintaining reserves. Finally we consider when do political activities of charities cross the line and become no longer acceptable.

If you would like to discuss any of these topics in more detail, please contact us.

Annual Information Statement

For charities with a 30 June year end, the ACNC’s 2016 Annual Information Statement (AIS) is due for lodgement on 31 January 2017. If your charity’s revenue exceeds $1m, you must also lodge audited financial statements. However, if your revenue is between $250,000 and $1m, you must lodge financial statements which have been either audited or reviewed. If your charity’s year end is not 30 June, your AIS is due six months after your year end.

If you would like our assistance to complete your AIS or require an audit or review, please contact us.

Charity reserves

The ACNC has provided guidance on maintaining and spending reserves. Reserves are amounts set aside to cover unexpected costs. Reserves are an important aspect of operating a charity.

There has however, been some uncertainty as to how much can be retained as reserves and what they can be used for. If reserves are too high, there is a risk that the charity could be seen to not be applying its assets for charitable purposes. The ACNC has provided guidance on factors to consider in determining an appropriate level of reserves and what those reserves can be used for.  Read the guidelines...

Political purposes

We remind charities that there are restrictions on what political purposes are acceptable. The definition of charity states that an entity cannot be a charity if it has a purpose which is a disqualifying purpose. A disqualifying purpose means:
bulletThe purpose of engaging in, or promoting, activities that are unlawful or contrary to public policy or
bulletThe purpose of promoting or opposing a political party or candidate for political office.

Note that public policy is not the same as government policy. Therefore activities are not contrary to public policy just because they are contrary to government policy. It is acceptable to promote or oppose a change to any matter established by law, policy or government practice if this furthers or aids your charitable purposes.

In relation to political parties, it is acceptable to distribute information or advance debate about the policies of political parties or candidates, such as by assessing, comparing or ranking those policies, if this aids your charitable purpose. For example, an aid organisation might assess and compare political parties’ policies on foreign aid. However, you must ensure that your support furthers your charitable purpose rather than the support itself being your primary purpose. Giving money to a political party or candidate may be acceptable if it aids your charitable purpose, but we would not recommend specific fundraising for a political party.

Paul Tan

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