A common misconception among new grant seekers is that any organisation with a not-for-profit purpose qualifies as an eligible not-for-profit (NFP) for funding. Whether they clearly outline it or not, the definition that funders have in mind is more specific. They will request evidence with your grant application and/or conduct due diligence using your Australian Business Number (ABN) and other publicly available information.

You can avoid wasting time and resources on opportunities you are not qualified for by understanding the most common definition of a not-for-profit organisation.


What Is a Not-for-Profit Organisation?

In Australia, an incorporated not-for-profit organisation is a group that has established a formal legal structure under either state/territory or federal law, and whose governing documents prohibit the distribution of profits to members.


Common legal structures for incorporated NFPs include:

  • Incorporated Association: Registered under state or territory legislation (e.g., Associations Incorporation Act). Suitable for community groups operating mainly within one state or territory.

  • Company Limited by Guarantee: Registered under federal law, for organisations operating nationally or seeking certain tax concessions. Must have a constitution and is regulated by ASIC and, if a charity, the Australian Charities and Not-for-profits Commission (ACNC).

  • Co-operative: Registered under state or territory law, suitable for member-owned organisations with a democratic structure.

 

Key Requirements for Incorporated NFPs

  • Governing Document: Must have a constitution or set of rules that clearly states the organisation’s not-for-profit purpose and prohibits distribution of profits to members.

  • Legal Registration: Must be incorporated under the relevant legislation for its chosen structure.

  • Australian Business Number (ABN): Required for most organisations but does not in itself confer NFP status.

  • Charity Registration (if applicable): Organisations seeking to be recognised as charities must register with the ACNC. Only registered charities can access certain tax concessions, such as Public Benevolent Institution (PBI) or Deductible Gift Recipient (DGR) status.

 

Why Does This Distinction Matter?

Many grant programs are only open to organisations that can demonstrate their incorporated NFP status. They will categorically decline applications from organisations that they define as ineligible.

We sometimes receive enquiries from groups in the two categories below who are unlikely to be eligible for not-for-profit grant opportunities.

  • Informal groups or unincorporated associations, even with a not-for-profit purpose.

  • A public company that is not registered with the ACNC or that does not have appropriate governing documents outlining not-for-profit incorporation. Those with a social impact purpose may instead qualify for social enterprise certification, for example, with Social Traders or People and Planet First. Social enterprise certification can open doors to other purpose-driven grant programs.


Steps to Ensure Eligibility for Grants

  • Check your legal structure: Confirm your organisation is incorporated under the appropriate legislation for your state/territory or nationally.

  • Review your governing documents: Ensure your constitution or rules clearly state your not-for-profit purpose and prohibit profit distribution to members.

  • Understand grant eligibility: Carefully review grant guidelines and funder requirements before applying. Regardless of whether the funder requires proof of eligibility, they will conduct due diligence checks on your application. If ineligible, it will go straight into their ‘No’ pile.

By understanding eligibility, you can increase your chances of success and avoid unnecessary time and rejections.

Here are a few useful resources where you can learn more about the structures of charities and other not-for-profit organisations.

  • https://www.acnc.gov.au

  • https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/getting-started/know-your-legal-structure

  • https://www.nfplaw.org.au/free-resources/getting-started/legal-structure

Please note: the information on this page is not legal advice.