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:
- An entity that has DGR endorsement in its own right
- An entity that is only a DGR in relation to a fund, authority or institution it operates. In this instance, only gifts to the fund, authority or institution are tax deductible
Some examples of the types of organisations eligible for DGR status include:
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. As the GiftPack explains, 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