As we enter 2022, there is a major change on the horizon that will reduce the reporting burden for charities.
The thresholds for determining a charity’s size are changing. This is good news for thousands of charities that will see their sizes shift downward and, consequently, have their reporting obligations reduced.
This will free up time, effort and resources that charities can direct towards their charitable work to support millions of people nationwide.
The change is part of the government’s efforts to reduce red tape for Australia’s charities. Reducing red tape for the charity sector is a vital part of the ACNC’s work, and is set out in our third object: to ‘promote the reduction of unnecessary regulatory obligations on the sector’.
Minimising red tape is crucial in supporting a vibrant, robust and innovative sector. We want charities to be able to focus their efforts and funds on providing services rather than being bogged down in unnecessary administration.
The ACNC works across governments to streamline reporting requirements for charities regulated by other agencies, and we work with states and territories to harmonise reporting requirements across the country.
Streamlined reporting reduces duplication for charities. It means they only have to report once to the ACNC, and in turn we share charity reporting information with other government agencies that require it.
The changes to charity size thresholds will see about 2500 additional charities no longer required to produce financial reports – they will only be required to complete an Annual Information Statement. In addition, around 2700 additional charities will be allowed to have their financial report subject to a review instead of an audit.
When charities complete their 2022 Annual Information Statements – which, for many, will cover a reporting period between 1 July 2021 and 30 June 2022 – the thresholds will change.
The table below compares the old and new revenue thresholds for determining whether your charity is small, medium or large for financial reporting purposes.
|Size of charity||Current revenue thresholds for the 2021 AIS||Revenue thresholds from 1 July 2022 for the 2022 AIS||Audit/review requirement|
|Small||Less than $250,000||Less than $500,000||Only have to complete their Annual Information Statement online.|
|Medium||$250,000 - $999,999||$500,000 - $2,999,999||Financial report can be either reviewed or audited.|
|Large||$1 million or more||$3 million or more||Financial report must be audited|
On 15 February we will hold a webinar to provide more information to charities about the changes. The webinar is free, and charities can register their attendance through the ACNC website.
We welcome the changes as an appropriate balance in reducing the regulatory burden on charities while maintaining suitable transparency of their operations and finances. We look forward to the relief these changes will bring for many charities in the years to come and the resulting benefits for the community.
Throughout 2022 we will continue our efforts towards reducing red tape in the charity sector, as well as work with charities to promote the difference they continue to make in the community despite the many recent challenges the sector has faced.
The Hon Dr Gary Johns