The importance of good governance
THE IMPORTANCE OF GOOD GOVERNANCE
The bushfire crisis has seen an unprecedented amount of donations made to a range of not-for-profit organisations. As a result, the need for good governance and record keeping practices are as important as ever stressed the ATO.
You need to make sure your NFP is operating for purpose. If your organisation is a DGR, you can only use tax-deductible gifts for the purpose of the DGR category you are endorsed under.
You must also keep records relevant to your organisation's status as a DGR. Your records must show that all gifts and deductible contributions are being used for your principal DGR purpose.
Good records help you manage your obligations and make it easier to report and pay on time. Some of the basic records you may need to keep include:
- Governing documents
- Financial reports and operational records
- Tax invoices and income tax records
- Copies of reviews of entitlement to tax concessions, and
- Records to help prepare tax statements and returns.
Your records must be kept for five years and be in English, or easily converted to English.
You should review your circumstances and entitlement to DGR endorsement regularly.
The Australian Charities and Not-for-profits Commission also has a number of useful resources for charities including the record-keeping checklist and self-evaluation checklist. Dan Wade is the audit expert at Wrights Chartered Accountants, make an appointment to speak with him here .
