Are all charities deductible gift recipients (DGRs) and can my DGR fundraise?

In this edition of It depends, special counsel Carly Ashwood talks about whether all charities are deductible gift recipients (DGRs) and whether your DGR can fundraise.

Keep an eye out for more videos in our Not-for-profit and charities legal 101 series in the coming weeks.

Video transcript

Welcome to this video in our Not-for-profit and Charities Legal 101 Series. I’m Carly Ashwood, a special counsel in the corporate advisory team here at Cooper Grace Ward Lawyers. Today, we’ll be talking about what charities are entitled to be endorsed as deductible gifts recipients and the fundraising requirements for charities.

Are all charities DGRs?

The answer to whether all registered charities are entitled to deductible gift recipient status does not depend. The answer is no. Entities that are registered as charities with the ACNC are entitled to charity tax concessions, but they are not automatically entitled to DGR status. DGR status means that a donor of $2 or more to the entity can claim a tax deduction for the donation. This endorsement is reserved for only some charities.

How can my registered charity be endorsed as a DGR?

Whether you’re registered charity is entitled to deductible gift recipient status will depend on its objects and activities. It will also need to apply to the ATO for this endorsement. If there’s a charity application on foot, the application is usually made to the ATO through the ACNC charity registration process. Charities that are entitled to deductible gift recipient status are set out in the 1997 Tax Act and include health promotion charities and public benevolence institutions. These two types of DGR entities are assessed as meeting the requirements by the ACNC. The ACNC passes this recommendation onto the ATO and then the ATO applies DGR status. Other categories of DGR are assessed and endorsed by the ATO and not the ACNC. These include environmental and cultural organisations, scholarship and building funds, necessitous circumstances funds and harm prevention charities.

Can my DGR fundraise?

It depends. DGR endorsement does not automatically entitle an entity to fundraise. There are different requirements at state and territory level, and it’s important to be aware of these different requirements and register where required to do so. There are also exemptions in some jurisdictions, and this usually turns on the activities and the objects of the entity. Further, if the entity will be conducting raffles, auctions or similar games, there are other requirements in some states and territories and further registrations are required. Therefore, it’s important to be aware of the requirements and register if required to do so. Because the fundraising requirements are not national, there is not one registration that covers all requirements in Australia. If you have any questions about DGR endorsement or fundraising, please feel free to contact me. Please also tune in for other videos in our Not-for-profit and Charities Legal 101 Series. Thank you.