alert icon The Australian Government has announced reforms to the Deductible Gift Recipient (DGR) system. Full details on the DGR reform process can be found here: www.acnc.gov.au/DGRreform

Points to remember about DGR status:

  • The Australian Taxation Office (ATO) decides on DGR endorsement.
  • The ACNC decides whether your organisation is a charity or not, and then which subtype it is registered as – not all charities are able to be DGRs.
  • Some DGR categories require registration with the ACNC first.
  • You can apply for charity registration and DGR endorsement in the ACNC's online registration form (we pass on the relevant information to the ATO).

In this factsheet

Who can get tax deductible gifts or contributions

Organisations or agencies who are endorsed (approved) by the Australian Taxation Office (ATO) or named in tax law as ‘Deductible Gift Recipients’ (DGRs) may receive:

  • tax deductible gifts, such as financial donations, and
  • tax deductible contributions, such as the purchase of a ticket to attend a fundraising event.

Also, some donor organisations and grant makers can only fund DGRs.

Whole or part of an organisation

To be endorsed by the ATO, your charity must fit into a ‘general DGR category’ described in tax law. It can be endorsed in one of two ways:

  • whole DGR endorsement – your charity is endorsed as a whole because the whole of your charity fits into the DGR category (for example, if your charity is a registered public benevolent institution), or
  • part DGR endorsement – your charity is endorsed for the part of your charity that falls into a DGR category (for example, where your charity operates a fund or institution which falls into a DGR category).

Only the ATO decides on DGR endorsement, not the ACNC. However, you can request DGR endorsement when you apply to the ACNC for charity registration (using the ACNC's online registration application form). We will pass on that specific part of our form to the ATO. You will need to show that your organisation meets the DGR criteria, and attach the relevant DGR schedule.

If your organisation is not charitable, you will need to apply directly to the ATO.

guides icon For more detail, read the ATO's guidance: Can you be endorsed as a DGR?.

The steps you take depend on whether your organisation is a registered charity, or eligible to be registered.

Check the ACNC Charity Register to see if your organisation is already registered with the ACNC. If it is registered, you can also easily check to see if it has DGR endorsement or not by clicking on the Australian Business Number (ABN) link on your charity’s entry on the ACNC Charity Register. This link goes to your charity’s page on ABN LookUp, which lists tax concessions and endorsements.

Is your organisation a registered charity?

The following applies to charities which have or are entitled to whole DGR endorsement.

Where your charity has part DGR endorsement because it operates a fund or institution, you will have to check the relevant DGR category to work out whether ACNC registration is required for your charity, or the fund, or both.

  • Yes, it is registered, and a DGR
    You do not need to do anything else, other than understand your charity’s obligations to the ACNC, and to the ATO, as a DGR.
  • Yes it is registered but is not a DGR.
    If you seek DGR endorsement, you can apply directly to the ATO, using the ATO application form.
  • No
    If you apply to register your organisation as a charity with the ACNC, you can also apply (using the same form) for charity tax concessions, and DGR endorsement from the ATO. The ATO DGR table sets out the categories for DGR entitlement.

Find out who can apply to register with the ACNC.

  • Yes
    For some DGR types, your organisation must be registered as a charity with the ACNC before it can be endorsed by the ATO.
  • No
    If your organisation is not able to be registered as a charity, you can still see if it is eligible for DGR status and then apply directly to the ATO.

The table below has some examples of DGR categories that need ACNC registration. Check the full ATO DGR table, which lists the more than 40 categories set out in tax law.

Example DGR category

Requirement

Hospital carried on by society or association

Animal welfare charity

Must be a registered charity

Public university

Must be a registered charity or a government agency

Public benevolent institution (PBI)

Health promotion charity

Must be a registered charity of this specific subtype

Scholarship fund

Overseas aid fund

Harm prevention charity fund

Must be a registered charity or operated by a registered charity

Necessitous circumstances funds

Must be a government agency or, if it can be registered as a charity, then it must be a registered charity*

School building fund

Approved research institution

If it can be registered as a charity, then it must be a registered charity*

*This refers to the special condition that the fund or institution must either be a registered charity or a ‘non ACNC type of entity’. A fund or institution that is not an ‘entity’ or is not eligible to be a charity will be a non-ACNC type of entity. This type of fund or institution does not need to be registered as a charity in order to satisfy the special condition in the relevant DGR category.

For example, a fund that is merely a bank account, and was not established under a trust deed, is not considered to be an entity by the ATO. Such a fund would meet the conditions of, for example, a school building fund (item 2.1.10 in the DGR Table) without needing to register with the ACNC.

On the other hand, if that fund was a separate ‘entity’ (for example, because it is established under a trust deed), and also meets the requirements of being a charity, it must be registered with the ACNC to be endorsed as a DGR.

For more information on what type of funds may be entities you can read:

If you are not sure, contact the ATO to confirm whether your organisation or fund or institution needs to be registered before you apply for registration with the ACNC.

Even if your organisation is a charity, it must still meet all of the ATO’s requirements for DGR endorsement, as set out in the ATO GiftPack and its other guidance.

The requirements for DGR endorsement are that an organisation:

  1. has its own ABN
  2. falls within a general DGR category (as set out in the ATO DGR table) or have a fund or institution that is part of the organisation which falls within a general DGR category
  3. has acceptable rules for transferring surplus gifts and deductible contributions on winding up or DGR endorsement being revoked:
    • by having DGR revocation clauses in its governing documents (such as its constitution, rules or trust deed), or
    • by showing it is required to do this by law
  4. maintains a gift fund (if seeking endorsement for the operation of a fund, institution), and
  5. generally, is established and operated in Australia (the 'in Australia' condition).

DGR revocation clauses

A DGR revocation clause is the main way an organisation can show that it is required to transfer any surplus gifts, deductible contributions and related money to another DGR if it:

  • is dissolved or wound up (closed), or
  • has its DGR endorsement revoked (cancelled) by the ATO (whichever comes first).

Important - To be registered as a charity, the ACNC requires that your clauses must also state that this transfer is to another DGR with a similar charitable purpose.

If applying through the ACNC registration application form

The online form will ask you to choose whether you are seeking DGR endorsement for the whole of your organisation, and/or just part of it (such as a fund or institution), and then ask you to paste in the relevant clauses.

Applying for endorsement as a whole DGR

For endorsement as a whole (‘whole DGR endorsement’), you will need to confirm that your organisation has a revocation clause in its governing documents and copy that clause into the form, with the clause number.

The clause must state that if your DGR is wound up or its endorsement is revoked, then all remaining gifts, deductible contributions and money received (as part of such gifts and contributions) will be transferred to another DGR with a similar charitable purpose.

See the ATO’s information on DGR endorsement (including sample clause).

Applying for endorsement of a part DGR (fund or institution)

For endorsement for a fund or institution your organisation owns or operates (‘part DGR endorsement’), you will need to confirm that the gift fund your organisation maintains has a revocation clause in its governing documents and copy that clause and its clause number into the form.

You need a revocation clause that states that any remaining surplus assets of a gift fund will be transferred to another DGR.

See the ATO’s gift fund requirements (including sample clause)

There are also certain government registers which list organisations that have been granted DGR status, including the:

If you wish to apply for DGR endorsement for your organisation and it fits within one of these categories, we recommend you contact the Register directly, as registration can take some time. You can also confirm this with us as part of your application for registration with the ACNC.

ATO guidance: Can you be endorsed as a DGR?

Charity tax concessions

ACNC registration checklist and registration application guide

Not-for-profit Law: Guide to DGR