Certain non-profit organisations are eligible for endorsement as deductible gift recipients (DGR). A DGR-endorsed fund or organisation can receive tax-deductible gifts. Being a DGR may mean that your organisation is more attractive to people who want to support you financially. The income tax law determines which types of organisations or funds can qualify for DGR status.
Some DGRs are listed by name in the income tax law. They include organisations like Landcare Australia Limited, Amnesty International Australia, and the Australian Academy of Science. For other organisations to be DGRs, they must fall within one of a number of categories set out in the income tax law. Examples include public benevolent institutions, public universities, public hospitals and school building funds.
All organisations claiming DGR status (except those listed by name in the income tax law or regulations) need to be endorsed by the Tax Office. If an organisation is not endorsed donors cannot claim income tax deductions for their donations. As well as falling within a specified DGR category, your organisation needs to:
- Have an Australian Business Number
- Have acceptable rules dealing with transfer of assets upon winding up
- Be in Australia (with some exceptions)
Some DGR categories require an organisation to maintain a public fund.
For further information about DGR categories and the endorsement process for obtaining DGR status, contact the Australian Charities and Not-for-profit Commission www.acnc.gov.au or the ATO www.ato.gov.au.
If you believe you are entitled to be endorsed as a DGR, you should apply to the ACNC or the Australian Tax Office.