DEDUCTIBLE GIFT RECIPIENT
A deductible gift recipient (DGR) is an entity or fund that can receive tax deductible gifts.
The national peak body Australian Neighbourhood Houses and Centres Association Inc (ANHCA), is now included in the table of specific welfare and rights recipients in the Income Tax Assessment Act 1997.
What does this mean for Linkwest member Centres?
ANHCA has established a mechanism which enables Centres through ANHCA, to:
- take donations for which the donor or philanthropic body wishes to claim a tax deduction
- apply for grants provided by philanthropic bodies and foundations which require DGR (tax deductibility) status.
The ANHCA public fund for DGR is now open for business. In the first instance, please contact our Sector Development Manager, Mihaela Nicolescu, email: [email protected]
Why don’t all Centres have DGR themselves rather than having to go through this process?
Ideally, all Centres would have DGR status in their own right. Some Centres do – about 14% Australia-wide – but others have been turned down for endorsement because the variety of services they provide do not fit into an existing DGR category. ANHCA lobbied hard for many years to change the tax laws to include a general DGR category for Centres, and continues to lobby with the ATO and the ACNC about how DGR status might be extended to cover Centres.
Should a Linkwest member Centre still pursue DGR/PBI status independently?
ANHCA’s listing does not enable Salary Packaging under the Fringe Benefit Tax exemption scheme, and so this is only a part step to the truly level playing field we all wish for. ANHCA and the state peak bodies - including Linkwest - will continue to lobby for access to Public Benevolent Institution status (PBI) for Centres.
For those Centres that do not currently have DGR status and those who will be unlikely to obtain it under current legislation and regulations, the ANHCA fund will provide a much needed and previously denied avenue and opportunity for fundraising.
What is the ANHCA Public Fund?
The ANHCA Public Fund is a mechanism overseen by ANHCA which can assist community organisations that are part of ANHCA’s national network of neighbourhood houses and learning centres to raise funds through public and corporate donations. The listing of the Australian Neighbourhood Houses & Centres Association (ANHCA) Inc. in Division 30, section 30-45 of the Income Tax Assessment Act 1997 ensures donations of $2 or more to the ANHCA Public Fund are tax deductible.
How will the ANHCA Public Fund help my organisation?
The ANHCA Public Fund can help the fundraising efforts of eligible organisations throughout Australia by providing a tax deductible vehicle for donor funds. While your organisation will still initiate, plan and fundraise for the work within your community, the ANHCA Public Fund can legally accept funds to finance that work, and offer a tax deduction to donors.
Who can donate to the ANHCA Public Fund?
Anyone can donate to the ANHCA Public Fund, including individuals, companies and philanthropic trusts (including Public and Private Ancillary Funds). ANHCA is specifically listed in Division 30, section 30-45 of the Income Tax Assessment Act 1997 as a recipient for tax deductible gifts.
Donated funds must contribute unconditionally to the ANHCA Public Fund in order to be tax deductible, but donors can indicate the preferred beneficiary of their gift when they donate.
Any release of donated funds is subject to the approval of the ANHCA Public Fund Subcommittee. They may only release funds for projects and purposes which fall within ANHCA's purposes, which include “to support the activity and work of the Neighbourhood House & Centre Sector in Australia”.
My organisation has DGR status already – does this mean ANHCA will be competing with us for funds?
If your organisation is already a DGR, the ANHCA Public Fund should have no effect on your organisation or its capacity to fundraise for work within your community. The Public Fund is there to assist those organisations which are not able to obtain DGR status themselves to raise funds for their own work.
How will the process work?
In WA, a Linkwest member Centre should approach Linkwest via phone or email to discuss the project or purposes for which it is raising funds. Linkwest will explain and help guide member Centres through the application process.
Once submitted, the ANHCA Public Fund Subcommittee will consider the application and, if it is eligible, will set up an account for the project.
Donations will be paid directly into the ANHCA DGR Fund. ANHCA will provide receipts for donations. Monies will be held in the DGR Fund and released on a quarterly basis or as otherwise arranged, following review by the ANHCA Public Fund Subcommittee.
Do we have to direct funds to a project, or can donors just provide us with general support?
As long as the ANHCA Public Fund Subcommittee are satisfied that you are using any donated funds to further the community-focused activities and purposes of your organisation, funds may be collected for general support.
What kind of organisations can apply to use the ANHCA Public Fund?
In Western Australia, to be eligible, an applicant must:
- be an organisation (not an individual person)
- have a legal identity i.e. be an incorporated body
- be a current financial Full or Associate member of Linkwest
- apply donated funds to support the work of your Centre
Why are you only accepting donations of $100 and up?
This is a practical issue. The costs associated with processing, receipting and providing thanks for a large number of small donations would significantly impede ANHCA from covering its own costs. However, this decision will be reviewed as the fund’s capacity grows.
Why is there an ANHCA Public Fund Subcommittee?
The ANHCA Public Fund Subcommittee is legally responsible for making sure that tax deductible donations are used appropriately. This is a requirement for the fund to retain its DGR status and reassures donors and government that donated funds are not being misused. The Subcommittee therefore has a legal duty to approve all releases of funds, to make sure they are consistent with ANHCA’s purposes.
What happens to the funds in the hands of the ANHCA Public Fund Subcommittee?
Donated funds will be held separately to other ANHCA income. No interest will be paid on donated funds and they will not be separately invested or separately accounted for in financial statements. Legally, all donations received by the ANHCA Public Fund belong to ANHCA for distribution at the discretion of the ANHCA Public Fund Subcommittee.
Is there a charge for the use of the ANHCA Public Fund?
Yes. The ANHCA Public Fund attempts to cover its costs via deducting 5% from each donation, to defray the costs associated with:
- Review and approval of the organisation and project as being within ANHCA’s purposes
- Establishment of management account within the ANHCA Public Fund
- Receipt and processing of tax deductible donations
- Issuing of receipts to donors
- Distributions to eligible organisations
- Advice and general liaison with applicant organisation
- Follow-up for reporting and acquittal purposes.
Want more information?
Visit the ANHCA website