Alert

Who does this affect?

All not-for-profit organisations operating in Australia, particularly those employing staff and recipients of direct government funding.

What do you need to do?

Review the Draft Report and consider whether your organisation wishes to lodge a submission with the Commission. Submissions are due by 24 November 2009. We can help.

Authors
Geoff Adams  
Senior Associate (Pro Bono & Community Programs)

Katherine Urbanski  
Solicitor

Chloë Johnco  
Solicitor

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Chris Wheeler  
Partner
T +61 2 6217 6081

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Sydney
Robyn Chalmers  

Melbourne
Diana Nicholson  

Perth
David Perks  

Brisbane
David Bell  

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The Australian Government has been considering how to improve regulation of the not-for-profit sector. As part of this process, the Productivity Commission (Commission) was asked to review the contribution of the sector.

The Commission released its draft research report (Draft Report) on 14 October 2009. The Draft Report concluded that there is a need for wide-ranging reforms and a reduction in compliance costs faced by the not-for-profit sector.

Specific recommendations made in the Draft Report included:

• implementing systems to better measure the contribution of not-for-profits, and to allow comparisons between organisations

• creating a new Commonwealth incorporated associations legal structure, and to allow not-for-profits to migrate between different forms of legal entity

• consolidating Commonwealth regulatory oversight into one body - a ‘Registrar for Community and Charitable Purpose Organisations’ which would register and regulate not-for-profits, register and endorse tax concessions, register cross-jurisdictional fund raising, provide governance training and handle complaints

• simplifying the process of obtaining tax endorsement, and adopting a new statutory definition of ‘charitable purpose’

• considering a broader scope for deductable gift recipient (DGR) status, and promoting measures such as planned giving to better support not-for-profits’ access to funding

• introducing national harmonised fundraising regulation and accounting standards

• exploring options to expand business support programs to not-for-profits engaged in social enterprise activities

• reforming direct government funding including minimising compliance burdens, reviewing funding models, and reviewing purchasing and contracting arrangements. In particular, recommendations were made that governments should fully fund those activities and services that they would otherwise provide directly and should choose appropriate mechanisms for engaging with not-for-profits (which might include longer-term collaborative relationships), and

• establishing an Office for Not-For-Profit Sector Engagement within the Prime Minister and Cabinet portfolio, in order to build stronger, more effective relationships between the Government and not-for-profits.

The Commission has invited submissions to assist with preparing its Final Report. Submissions are due by 24 November 2009.

If you would like further information about the Draft Report, or if you require assistance with preparing a submission to the Commission, please contact us.