Want to Start a Charity? Here’s What You Need to Know
- Marketing Manager
- Aug 14
- 3 min read
Starting a charity is a meaningful way to make a difference in your community, but the process can feel daunting. Whether you’re aiming to address social, environmental, or cultural issues, there are several key steps to get your charity registered and operating in line with Australian law. In this blog, we’ll take you through the process of starting your own charity, ensuring that you’re set up for success from day one.
Why Start a Charity?
Charities are a vital part of Australia’s social fabric, and they help people in need, support causes close to our hearts, and drive positive change in the world. But before diving into this rewarding venture, it’s essential to understand the legal requirements and obligations that come with managing a charity.
Step 1: Understand the Legal Structure
The first thing you need to do when starting a charity is to choose the right legal structure. A charity can take several forms, including:
Incorporated Association: Often the simplest form, best suited for small to medium-sized charities.
Company Limited by Guarantee: Typically used for larger charities, especially those with national or international reach.
Trust: A more complex structure, often used for specific purposes like philanthropic foundations.
Choosing the right structure depends on your charity's purpose, size, and funding sources. Consult with a lawyer or a professional advisor to select the one that suits your needs.
Step 2: Register Your Charity
In Australia, charities must be registered with the Australian Charities and Not-for-profits Commission (ACNC). This registration is necessary to access certain benefits, such as tax exemptions and eligibility for government funding. Here's how to register your charity:
Choose a Name: Pick a unique name that reflects your charity’s mission and values.
Prepare a Governing Document: This document outlines the charity’s purpose, governance structure, and the rules under which it will operate.
Apply for ACNC Registration: You’ll need to submit your application online and include details about your charity’s structure, activities, and goals.
Once your charity is registered with the ACNC, you’ll be recognized as a legitimate charity in Australia, with all the rights and responsibilities that come with that.
Step 3: Apply for Tax Exemption
After registering your charity with the ACNC, you can apply for tax exemptions through the Australian Taxation Office (ATO). This includes exemptions from income tax, GST, and Fringe Benefits Tax (FBT).
To apply for tax concessions, you’ll need to:
Register your charity with the ATO
Provide documentation to show that your charity meets the requirements for tax exemptions (e.g., not-for-profit status and charitable purpose).
Once your charity is approved for tax exemption, you can focus on making the most of your resources for the cause you care about.
Step 4: Comply with Ongoing Legal Obligations
Running a charity comes with ongoing responsibilities. You must meet ACNC and ATO reporting requirements, which include:
Annual Returns: Charities are required to submit an annual return to the ACNC outlining their activities and financial performance.
Governance and Transparency: Your charity must comply with governance standards set by the ACNC, including having a board of directors or trustees who oversee operations.
It’s important to regularly check for any changes in charity laws and update your operations accordingly to ensure compliance.
Step 5: Fundraising and Financial Management
Effective fundraising is essential to support your charity’s work. This can include public appeals, corporate sponsorships, events, and online donations. To manage these funds responsibly, you’ll need to:
Set up a separate charity bank account: Keep your charity’s finances separate from personal or business accounts.
Maintain financial transparency: Keep detailed records of donations and expenditures to meet ACNC and ATO requirements.
Get the Right Help to Start Your Charity
Starting and running a charity can be a lot of work, but it’s incredibly rewarding. From registration to compliance, there are many steps along the way. Fortunately, with the right guidance, you can easily navigate these processes and get your charity up and running.
If you're unsure where to start or need help with registering your charity,
ProfitCloud’s ASIC Agent Services can guide you through the entire process, ensuring that all legal and tax requirements are met efficiently.
Ready to make your charity idea a reality? Book a free consultation with us today, and let’s make sure you’re set up for success!
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