Not for Profit

1 E.g. Corporations Act 2001 for NFP Public Companies Limited by Guarantee, charitiesregistered with the Australian Charities and Not-for-profits Commission and various statelegislation for Incorporated and Unincorporated Associations–refer to CPA Australia’sCharities: A guide to financial reporting and assurance requirements for more details.External compliance Tax and payroll related obligations (compliance) Operations AppendixA Appendix B Accounting systems and Cyber security Financial risk management Policies,procedures, controls and systems Governance Glossary of Terms/index 4 FinancialManagement and Governance Guide for Not-for-Profit (NFP) Organisations IntroductionWhat is a Not-for-Profit (NFP)? An organisation that is an entity operating for its purpose andnot for the profit or gain (either direct or indirect) of individual members2 . What is a charity?A type of NFP with charitable purposes that are for public benefit, that doesn’t have adisqualifying purpose and is not an individual, political party or government entity. This isbased on the legal meaning as per the Charities Act 2013. Not all NFPs are charities, forexample a sporting club is a common type of NFP which does not typically fall within thedefinition of a charity3 . What is the difference between“financial management”and“governance”? “Financial Management”refers to the staff of an NFP and how they managefinancial operations.“Governance”typically refers to strategic oversight by those individuals(the board/committee)entrusted with ensuring the NFP is fulfilling its objectives.Governance includes oversight of the systems, processes, procedures and controls of anNFP.