Definitions of common terms used in the not for profit sector
ACNC Australian Charities and Not-for-profits Commission
TCC Tax Concession Charity
ABN Australia Business Number
Deductible Gift Recipient (DGR1)
Most philanthropic grant-makers require grant
applicants to have DGR1 status. This means
their grants are tax deductible. Due to the
legal structure of many trusts and foundations,
they are legally required to give only to DGR1
charities.
Tax Concession Charity (TCC)
Charities that are registered with the ACNC
can receive charity tax concessions from the
ATO. TCC status exempts charities from
having to pay income tax. A large proportion
of philanthropic grant-makers require both
DGR1 and TCC status of their applicants.
ACNC Registered Charity Charities registered with the Australian
Charities and Not-For-Profit Commission are
often referred to as ‘registered charities’.
ACNC Charities are beholden to charity
legislation. A large proportion of grant-makers
require applicants to be ACNC registered.
Charities must be registered with the ACNC to
be eligible for TCC status. Some DGR
categories require ACNC registration.
Public Benevolent Institution (PBI) Public Benevolent Institutions are charities
focussing mainly on relief of poverty or
distress. It is an ACNC charity registration subtype.
Incorporated Association An incorporated association is a legal
organisational structure separate from its
members, requiring registration under
state/territory legislation. It generally requires
a committee, annual meetings, and certain
documentation and publications like an
annual statement.
Unincorporated Association An unincorporated association is not a
separate legal entity from its members. An
unincorporated association can register with
the ACNC if it has acceptable governing
documents, committee members, and ability
to meet ACNC governance standards. There
are a limited range of funders who grant to
unincorporated groups.
Auspiced Unincorporated groups who don’t have the
resources or legal eligibility to undertake a
grant agreement by themselves, but which
are operating as a nonprofit, can apply for
some grants if they are auspiced by a larger
organisation that does have DGR1 or
incorporated status. The Auspicing
organisation enters the funding agreement on
behalf of the smaller organisation, and often
manages the money and is the body legally
accountable to the grant-maker. Some
funders will not provide funding via auspicing
arrangements.
Social Enterprise There is no legal structure or registration
process to operate as a social enterprise in
Australia. They can be operated by for-profit
or not-for-profit entities. Social Enterprises are
regarded as businesses or activities carrying
out profit-making activities helping achieve
or fund a mission, or creating a public
benefit. There are a growing pool of funders
and initiatives in Australia that provide seed
funding and grants specifically for social
enterprises.
501(c)3 or equivalent Most US based funders require their applicants
to have the American nonprofit status
501(c)3, or their country’s equivalent. In
Australia the equivalent is ACNC Registration
and DGR1 status. Charities can also register
with the Charities Aid Foundation (CAF),
which acts as an auspicing body providing
501(c)3 to vetted organisations, who can then
accept tax deductible donations from
American donors.