Australia’s not-for-profit (NFP) sector continues to grow in scale and importance. According to the 2025 Australian Charities Report by the Australian Charities and Not-for-profits Commission (ACNC), there are now over 52,000 registered charities in Australia, supporting around 1.54 million workers and contributing approximately $222 billion in annual revenue to the economy.
While these numbers reflect a strong and active sector, they also highlight a growing expectation from regulators, donors, and grant bodies: NFPs must demonstrate financial transparency at all times. As the 2025/26 financial year-end approaches, many organisations are reviewing reporting processes, tightening internal controls, and preparing for Australian Taxation Office (ATO) obligations.
For NFPs, bookkeeping is not just about numbers. It is closely tied to mission delivery. If financial records lack clarity, funding confidence can weaken, reporting risks increase, and board decision-making becomes harder.
That’s why compliance has become central to modern accounting for not-for-profit organisations in Australia. In 2026, understanding ATO reporting requirements is no longer optional—it is part of responsible governance.
Below is a practical breakdown of what every small NFP in Australia needs to know.
1. NFP Self-Review Return (Key ATO requirement for small NFPs)
One of the most important changes in recent years is the introduction of the NFP Self-Review Return for non-charitable not-for-profits. If your organisation has an active Australian Business Number (ABN) and self-assesses as income tax exempt, you are required to lodge this return annually with the ATO.
The purpose is to confirm that your organisation still meets the criteria for income tax exemption. This includes reviewing:
- Your stated purpose
- Your actual activities
- Whether profits are used appropriately under NFP rules
The return is generally due by 31 October each year. This shift has increased the compliance burden for many small NFPs, especially those that previously had minimal reporting obligations.
2. Income tax returns for non-exempt NFPs
Not all NFPs are exempt from income tax. If your organisation does not meet exemption criteria, you must:
- Lodge a standard income tax return, or
- Submit a non-lodgement advice if applicable
This typically applies to organisations that generate commercial income or operate outside traditional charitable purposes.
For organisations in this category, working with experienced not-for-profit accounting firms can help reduce compliance risk and improve reporting accuracy.
3. ACNC reporting for registered charities
If your organisation is a registered charity, reporting obligations sit with the ACNC rather than the ATO. The key requirement is the Annual Information Statement (AIS), which must be lodged every year.
Depending on size:
- Small charities (under $500,000 revenue): AIS only
- Medium and large charities: AIS plus financial reports
The AIS must be submitted within six months after the end of the financial year. Even though charities report to the ACNC, the ATO still governs tax concessions and ABN obligations.
4. Record-keeping: the foundation of compliance
Strong reporting starts with strong bookkeeping. All small NFPs are required to maintain:
- Accurate records of income and expenses
- Documentation of grants and donations
- Evidence of financial transactions
- Records supporting financial statements
The ACNC 2025-2026 Regulatory Focus continues to educate charities that poor record-keeping can impact funding eligibility and increase regulatory risk.
This is where structured bookkeeping for not-for-profit organisations becomes essential. It is not simply an administrative function. It directly supports transparency and governance.
5. Governing documents and tax exemption rules
By 30 June 2026, NFPs that self-assess as income tax exempt must ensure their governing documents align with ATO requirements.
Key expectations include:
- No distribution of profits to members
- Clear charitable or community purpose
- Alignment between operations and governing rules
Failure to update governing documents may result in loss of tax-exempt status and additional reporting obligations.
6. Why compliance matters for NFP sustainability
For NPFs, financial reporting goes beyond compliance. It reflects trust between the organisation and its donors, grant providers, board members, and the communities it serves.
When reporting is unclear or inconsistent:
- Funding applications become harder to secure
- Donor confidence weakens
- Grant approvals may be delayed or rejected
Clear, structured reporting helps boards and stakeholders make better decisions and strengthens long-term sustainability.
This is why not-for-profit accounting services are increasingly in demand. Specialist expertise ensures reporting is accurate, timely, and aligned with regulatory expectations.
7. The role of specialist accounting support
Many NFP organisations now rely on external expertise to manage growing compliance requirements.
Support often includes:
- Preparation of compliant financial statements
- ATO and ACNC reporting assistance
- Grant and funding management
- Financial systems and controls improvement
Some organisations engage outsourced accounting services or partner with established accounting firms to reduce internal workload and improve reporting quality. The right partner helps NFPs stay compliant while freeing up time to focus on mission delivery.
Supporting Australia’s NFP sector
Keeping Company understands the realities of running a not-for-profit as you balance mission delivery with increasing compliance demands. Our team provides practical support by offering professional accounting for not-for-profit organisations as well as accurate and timely bookkeeping for the not-for-profit sector. We help NFPs stay compliant, organised, and confident in their financial reporting.
Meet our team of specialists on our About Us page and learn more about our range of outsourced accounting services in Sydney.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice, and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
Ryan Miller is the founder of Keeping Company, May 2011 – Present. A tie-loathing, people person with an entrepreneurial spirit. Ryan’s drive to modernize the accounting industry coupled with his desire to help people succeed saw the birth of Keeping Company. Focusing on the SME space, KeepingCo. empowers business owners by providing high-quality end-to-end accounting and business advisory services.
Ryan took his first Accounting role working at KPMG. He went onto further refine his skills as a Chartered Accountant taking the role of Director of a Chartered Accounting firm in Erskineville.
Ryan is a fully qualified Chartered Accountant and a member of the Institute for Chartered Accountants Australia and New Zealand. He is also a Registered Tax Agent and holds a Bachelor of Commerce from the University of South Australia.