NSW Non-government Schools Not For Profit Guidelines

A detailed guide to schools’ obligations under Section 83C of the Education Act 1990 (NSW).

About the Guidelines 

To be eligible for financial assistance from the NSW Government (funding), a non-government school (school) must not operate for profit.

The NSW Non-Government Schools Not For Profit Guidelines (the Guidelines) provides information on the ‘not for profit’ requirements under Part 7, Division 3 of the Education Act 1990 (NSW) (the Education Act). These Guidelines help schools to understand what they need to do to meet the requirements to remain eligible for funding. 

Understanding and applying the Guidelines

These Guidelines assist schools to understand and meet their obligations under the Education Act and Education Regulation. They don’t cover every possible situation schools might face when complying with the not for profit requirements.

Schools are responsible for ongoing compliance with the not for profit requirements in the Education Act and Education Regulation. The main responsibility rests with the school’s proprietor and governing body. Every member of a school’s governing body should know their role in making sure the school operates on a not for profit basis.

Schools must meet the not for profit requirements to be eligible for NSW funding – both when they first apply and to keep receiving it.

Schools and proprietors are expected to make well-informed decisions by following the not for profit requirements set out in the Education Act and Education Regulation, supported by these Guidelines. In all circumstances maintaining appropriate policy and records is essential for good governance and compliance.

For enquiries and support, email NESA’s Regulation of Non-Government School Funding Directorate at ngs83cenquiries@nesa.nsw.edu.au

 

Records to demonstrate compliance

Accordions titled 'Records to demonstrate compliance' through these Guidelines provide examples of relevant records that a school can maintain to demonstrate compliance with the not for profit requirements.

Note that the purpose of listing relevant records is not to impose additional requirements on schools, but is to provide schools with guidance on the types of records that may help to demonstrate that they have not operated for profit, if that is ever called into question. The lists are not intended to be exhaustive or prescriptive and may be subject to the contexts of schools.

This is an example of an accordion:

Records to demonstrate compliance example accordion

This is an example of how an accordion is used throughout these guidelines to highlight the Records to demonstrate compliance.

 

Executive summary

An overview of the Guidelines and copyright information.

Part A: Roles and responsibilities

Roles and responsibilities of proprietors, schools, the Minister, Advisory Committee and NESA.

Part B1: Not for profit requirements – Operation of the school

Assets, income and payments must be used for the operation of the school.

Part B2: Not for profit requirements – Reasonable market value

A school operates for profit if it pays more than reasonable market value for property, goods or services.

Part B3: Not for profit requirements – In any other way unreasonable in the circumstances

The reasonableness of payment for property, goods or services will be considered based on each case's facts and circumstances.

Part B4: Not for profit requirements – Governing body members

Payments made to members of the school's governing body.

Part B5: Not for profit requirements – Permitted payments and activities under the Education Regulation

Student scholarships and prizes, redress payments for abuse, recognised education and care programs, donations, community use, and more.

Part C1: Regulatory approach – Responding to for profit and non-compliant activity

Understand the routine and specific actions that NESA, the Advisory Committee and the Minister may take.

Part C2: Regulatory approach – Review of Advisory Committee recommendations

Investigation outcomes and types of recommendations following a Section 83C review.

Part D1: Appendix – Common transactions and areas of operation – Acquisition and financing of school property and land

Property, future purposes, mortgages and loans.

Part D2: Appendix – Common transactions and areas of operation – School leasing arrangements and land use

Leasing property, including unimproved land.

Part D3: Appendix – Common transactions and areas of operation – Management and utilisation of school assets and infrastructure

Leasing, sale and transfer of school assets and income, including for building works.

Part D4: Appendix – Common transactions and areas of operation – School financial operations and community engagement

Schools must meet requirements when lending, writing off or selling debts, and investing school income.

Part D5: Appendix – Common transactions and areas of operation – Operational expenditures and financial governance

Expenditure required for the operation of a school.

Part E1. References – Other relevant law

Other acts and regulations relevant for schools.

Part E2: References – Definitions/Glossary

Glossary of terms used in these guidelines.
Type: Guideline
Author: NSW Education Standards Authority
Publication Date: 17 April 2026

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