Membership basics
A membership scheme (or, in the case of schools, an alumni program) allows you to bring together…
Donors can only claim a tax deduction on donations made to organisations that are endorsed as a deductible gift recipient (DGR). Gaining DGR status is not as easy as you might think – it requires a lot more than just being able to prove your not-for-profit status or your worth to society.
Donors can claim tax deductions for gifts to DGRs in their income tax
returns, but there are rules about what sorts of organisations can
claim DGR status, and about the types of gifts eligible for
deductibility.
Who can and cannot be a DGR is defined by tax law – with only certain types of organisations eligible.
Some larger organisations are listed by name in Australia's income tax law (for example, Amnesty International) and are automatically classed as DGRs. Others must fall within a general DGR category set out in income tax law.
Here’s how the Australian Government’s ABN website defines DGR status:
A deductible gift recipient (DGR) is an entity or fund that can receive tax deductible gifts. There are two types of DGR endorsement:
Some examples of the types of organisations eligible for DGR status include:
OUR TIP: For a full list of DGR categories, refer to the Australian Taxation Office’s online Induction Package for Not-For-Profit Administrators, or go straight to the section titled 'Is my organisation eligible for DGR endorsement?'
To become a DGR, your organisation needs to fit the requirements set
down in law and be endorsed as a DGR by the Australian Tax Office.
To apply for a DGR endorsement from the ATO, your organisation will have to tick five boxes. An organisation will need to:
While not all gifts made to DGR organisations are tax deductible, the majority are. Tax laws state what types of gifts are tax deductible; for instance:
* may only be accepted by a limited number of DGRs
OUR TIP: The laws governing deductible gift recipient status are really complicated. Equip yourself with the basic information you need using the ATO’s Induction Package for Not-For-Profit Administrators, but then see if you can find yourself a (preferably pro bono) lawyer to guide your organisation through the process.
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