From 1 October 2020, the Australian Taxation Office (ATO) will have a new category of deductible gift recipient (DGR) available for community sheds (men's sheds and women's sheds).
Donors who donate $2 or more to a community shed that is endorsed as a DGR will generally be able to claim a deduction for their donation on their income tax.
To find out more about the ATO's requirements for DGR endorsement, visit the ATO's community sheds webpage.
A community shed must be registered as a charity to apply for DGR endorsement. This page explains the important considerations for a community shed in applying for charity registration and DGR endorsement.
Click on the heading below that best applies to your community shed for information about what you should do.
Free webinars to find out more
ACNC webinar about charity registration and DGR endorsement: Wednesday 14 October from 12pm-1pm (Melbourne time). Register for the ACNC's webinar now to find out about charity registration for a community shed and DGR endorsement. You can also ask any questions you have.
ATO webinar about the new DGR category for community sheds: This webinar - presented on 21 September - looked at what a community shed needs to do for DGR endorsement and the ongoing responsibilities that come with it. View a recording of the webinar.
You can apply directly to the ATO to have your community shed endorsed under the new DGR category.
Download and complete the form Application for endorsement as a deductible gift recipient. Send the completed form to the ATO.
The ACNC will start reviewing DGR-endorsed charities in 2020-21.
This is a good opportunity for you to review your community shed’s registration as a Health Promotion Charity (HPC) or Public Benevolent Institution (PBI) with DGR endorsement to make sure that it is still entitled to these charity subtypes.
Use our self-assessment tool to help you review your community shed’s registration.
Based on your answers in this tool, you can decide whether your community shed:
- is still entitled to be registered as an HPC or PBI and should keep its existing DGR endorsement as a PBI or HPC, or
- should update its registration and apply to the ATO for endorsement under the new DGR category for community sheds.
Updating your community shed's charity registration and applying for DGR endorsement
If your community shed is no longer eligible to be registered as an HPC or PBI, you can update its charity registration by completing the ‘Change charity subtype’ form available in the Charity Portal. This will also change the tax concessions your community shed is eligible for.
Note that administrative penalties may apply for failing to notify the ACNC of a change in your community shed’s circumstances.
To see if your community shed is eligible for DGR endorsement under the new category for community sheds, check the requirements on the ATO’s community sheds webpage.
If you think your community shed is eligible, you can apply directly to the ATO with the form Application for endorsement as a community shed deductible gift recipient.
A community shed must be registered as a charity with the ACNC to be eligible for DGR endorsement.
Before applying to be registered as a charity, it is important to understand the eligibility requirements for registration and the ongoing obligations that a charity has to the ACNC.
Take the time to review your community shed’s governing document and activities to ensure it is eligible for charity registration and the new DGR category.
A charity’s governing document must set out its nature as a not-for-profit and contain charitable objects. If your community shed does not have charitable objects you may consider adapting the following sample objects.
Make sure your community shed’s objects accurately reflect its purposes.
The [organisation] is established to be a charity whose purpose is to advance [health/social or public welfare] by operating a [men’s/women’s/community] shed to:
- improve the health of [men/women] who are at risk of health issues arising from loneliness and isolation
- facilitate programs that address mental, physical and emotional health issues in [men/women]
- provide meaningful activities where [men/women] can participate in the company of others to relieve isolation and loneliness
- undertake charitable activities for the benefit of the broader community.
If you decide to apply to register your community shed as a charity, please read the ACNC’s registration checklist to help you prepare.
You can apply for DGR endorsement in your community shed’s application for charity registration. Once your community shed is registered as a charity, the ACNC will send the DGR application to the ATO for processing.
Important points about charity registration and endorsement under the new DGR category:
- The law comes into effect on 1 October 2020 and endorsements under the new DGR category will not be applied prior to 1 October 2020.
- Applications for charity registration made after 1 October 2020 can be backdated to the date from which the community shed meets all the requirements for registration.
Submit an online application to register your community shed as a charity in the ACNC’s Charity Portal.
If you have a question
Attend one of the upcoming webinars (or watch the recording online later):
ATO webinar about the new DGR category for community sheds, Monday 21 September from 11am-12:30pm (Melbourne time).
ACNC webinar about charity registration and DGR endorsement, Wednesday 14 October from 12pm-1pm (Melbourne time).
For questions about DGR endorsement or trouble downloading the DGR application form, phone the ATO on 1300 130 248 between 8am and 6pm, Monday to Friday.
For questions about charity registration, contact the ACNC.