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:
- has its own ABN
- 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
- 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
- maintains a gift fund (if seeking endorsement for the operation of a fund, institution), and
- 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)