About not for profit funding requirements
Understand the not for profit obligations of non-government schools receiving government support, and the roles of NESA and the Advisory Committee.
The requirements
To be eligible for NSW Government assistance, a non-government school must not operate for profit. This is defined by Section 83C of the Education Act 1990 (NSW) (the Act).
Reasons a school can be considered for profit include that it:
- uses income or assets for purposes other than school operations
- pays for property, goods or services that are:
- not required for the operation of the school
- more than the reasonable market value
- otherwise unreasonable for a school receiving financial assistance
- pays members of its governing body (except as reimbursement for school operating costs).
The Education Regulation 2017 (NSW) details further situations where a school may or may not be operating for profit.
| Education Act | Part 7, Division 3 | Financial assistance to non-government schools |
| Education Regulation | Part 3 | Non-government schools |
Who must comply
Anyone involved in the running of a non-government school needs to:
- be aware of their school's obligations
- implement compliant practices in their school.
This includes (but is not limited to) the governing body or school executive.
The Guidelines
The NSW Non-government Schools Not For Profit Guidelines (NFP Guidelines) help schools to comply.
The Guidelines:
- explain the not for profit requirements
- explain what the Minister will consider when deciding whether a school is operating for profit
- guide schools on how to meet their obligations
- provide advice on the documents, policies and procedures schools can maintain to show compliance
- support transparent and accountable use of income and assets.
Updates
The updated NFP Guidelines were released on 17 April and are now in effect.
Schools should use the updated guidelines alongside the Act and Regulation. Want to know more?
Read the official notice.
Learn more about changes to NFP regulation.
NESA’s role
At NESA, we monitor and assess schools' compliance with the not for profit requirements by:
- making preliminary enquiries into matters
- conducting investigations
- issuing directions
- coordinating audits of financial affairs.
We also provide:
- resources and advice to schools
- secretariat support to the Non-Government Schools Not-for-profit Advisory Committee
- advice to the Minister for Education and Early Learning (the Minister) on regulatory policy and decision making.
The Advisory Committee's role
The Non-Government Schools Not-for-profit Advisory Committee (Advisory Committee):
- provides recommendations and advice to the Minister on:
- schools' compliance with NFP requirements
- the types of regulatory action the Minister may take
- issuing guidelines
- provides advice to NESA before we:
- issue directions
- undertake audits of financial affairs
- commence investigations
- works with NESA to develop advice and support materials for schools.