Rigby Cooke draws together the expertise of lawyers in our tax, commercial, property, employment law, litigation and wills and estates teams to offer an integrated service for not-for-profits and donors.
Not-for-profits and donors must navigate a host of legal issues in pursuing their philanthropic objectives.
Issues that must be addressed include structuring the entity, hiring and managing employees and/or trustees/directors, negotiating the tax system, taking part in commercial transactions, governance and reporting requirements, and unique issues associated with engaging in fundraising activities and recruiting volunteers.
Gifts from individuals and other entities are essential to the operation of the not-for-profit, and must be carefully structured to ensure that they are tax-effective for the donor.
We can also advise on the establishment of charitable trusts, and if desired can provide management services (note that you can appoint someone who may not charge fees).
Establishing a Not-for-profit
A range of options exist for structuring a not-for-profit body, from companies limited by guarantee through to unincorporated associations and trust structures.
Not-for-profits can be structured as charitable funds, private or public ancillary funds (PAFs), public benevolent institutions, necessitous circumstances funds, and other non-charitable categories. Each structure has unique features that impact upon the rights and obligations of the not-for-profit and how it is used to pursue the objectives for which it was established. Choosing an appropriate structure with the appropriate objectives and not-for-profits teams is critical.
We can help with:
- Establishing the not-for-profit, including advising on the most appropriate structure, preparing constituent documents and preparing wills where a fund is to be established under the will.
- Advising on charity status, charitable purposes, public benefit, non-qualifying purposes and commercial activities.
This could include liaising with the Australian Charities and Not-for-profits Commission (ACNC), the Australian Taxation Office (ATO), and the State Revenue Office (SRO).
Useful information about the types of not-for-profit can be found on the Justice Connect website: http://www.nfplaw.org.au/beforeyoustart
Tax Concession Eligibility
Tax law allows various concessions to not-for-profits, such as income tax exemptions and refundable franking credits, GST concessions, and fringe benefits tax concessions, provided certain criteria are met. They can also be accredited as deductible gift recipients (DGRs), allowing them to receive a wide range of tax deductible donations.
Managers of not-for-profits need to ensure they understand the relevant legislation, know how changes to the not-for-profit can impact its tax status, and can liaise with the authorities on compliance matters.
For a not-for-profit charity to obtain deductible gift recipient or DGR status, certain requirements need to be met, not all charities can obtain DGR status. Giving an asset as a donation may be deductable but only if certain conditions are met. Giving an asset may also trigger capital gains tax. Tax planning is essential to ensure that gifts are made in a tax-effective manner.
Rigby Cooke’s multi-disciplinary team can advise you on legislation, taxation and structuring matters to ensure your not-for-profit qualifies for tax concessions. We can also help you advise your donors on the most tax-effective structure of their generous gifts or bequests.