Transcript

Chris:

Hi everyone. Welcome to today’s Webinar, giving to legitimate charities. My name’s Chris Riches, I’m part of the ACNC’s education and public affairs team. Joining me to talk about donating to legitimate charities is Heath Eldridge. He’s a manager in the ACNC’s advice team. Hello, Heath.

Heath:

Hi Chris.

Chris:

Now, as always, just before we get into the presentation, we’ll whip through some of the usual housekeeping points. If you’ve got any troubles with the audio for the Webinar, you can try listening through your phone. You can call the number listed in the email you would have received upon signup, and put it in, put in the access code and listen to the Webinar that way. If you want to ask any questions during the Webinar, you can do so at any time by using the tools in the go-to Webinar panel on your screen. We have our colleague Simone on-hand and ready to answer any questions as they come through. We will try to respond to every question that comes in, but we not get to all of them. If you do ask a question and it isn’t answered, we do keep a record of all the questions asked and we’ll try to respond by email after the Webinar. Alternatively, if your question isn’t answered, please feel free to send it to us in an email and we’ll always get back to you.

We’re recording the Webinar today, as always. And we’ll publish the recording, including a copy of the transcript and the presentation slides on the ACNC website in coming days. So if you need to take off early or if you miss something, you can always come back and watch it again later. You also don’t need to write down all the website references that we’ll mention throughout the Webinar, we’ll include those in the follow-up email that we’ll send out in the coming days. Finally, as always, again, we really value your feedback. If you have any suggestions for ways we can improve our Webinars, please let us know in the short survey at the end of the Webinar or drop us a line via email. Okey-doke. So that’s all the admin stuff. Let’s get things rolling.

We’re going to cover a few different bits and pieces today. First up, we’re going to explain what a charity is and the difference between charity and not-for-profit. We’ll also provide an overview of the ACNC charity register and the registered charity tick tool, pretty handy tools. Two pretty handy things to know about. We’ll also talk about giving to non-charitable not-for-profits. Because there are plenty of great organisations out there which aren’t registered charities but which do good work and are well worth supporting. We’ll look at tax deductions, which are available for donations to charity and not-for-profits, and some of the ins and outs of deductible gift recipient of DGI status. And finally, we’ll have some tips for charities seeking donations as well as tips for those members of the public looking to donate to charity.

So what is a charity? Let’s take a quick look. Heath, can you give us a bit of an overview about what makes a charity a charity?

Heath:

Yeah, certainly Chris. That’s a good place to start with knowing what a charity is. So the Australian government uses the definition of charity which is set out in the Charities Act 2013. As part of meeting the definition of charity, an organisation needs to be not-for-profit and it needs to have a charitable purpose that is for the public benefit. And we’re going to talk about each one of those now.

The first point I mentioned is that charities need to be not-for-profit. Being not-for-profit is not really about how much money you make or whether you make a profit at all. It’s about the purpose and how resources and profits or surpluses are used. Not-for-profits cannot operate for the profit or gain of particular people, such as members of the charity, board members, their friends or relatives. Any charity… the profit the charity makes must go back into the charity to be used towards the charitable purpose and not distributed to any individual for their private benefit. And that is true of all not-for-profits.

The second requirement is that charities must have a charitable purpose. The list of allowed charitable purposes is in the Charities Act. The Act lists charitable purposes as such as advancing health, advancing education, and advancing the natural environment, to name a few. So in summary, for an organisation to be a charity, it must be a not-for-profit, and have a charitable purpose that benefits the public. There are a few other requirements for an organisation to be registered as a charity with the ACNC, but these are the main characteristics.

You can see that this definition encompasses many organisations that you may not ordinarily think of as charities, too. Schools, parents and citizen’s associations, environmental groups, and even churches and other religious institutions. Well they may not seem like charities in the common way people think of charities, they do meet the legal definition of charity.

Chris:

That’s a point that’s, and it’s probably a good time to distinguish I guess a charity from a not-for-profit, or if I can use the term, a non-charitable not-for-profit. Heath, how does a charity differ from a not-for-profit?

Heath:

That’s a good question, there. I did actually slip up on that one slightly in the previous slide. The difference essentially is in the phrase, a non-charitable not-for-profit. So charity is an organisation, as we said, that operates on a not-for-profit basis and that has a recognised charitable purpose. It may be useful to think of them in the way that we’ve shown in the diagram on the screen, which shows us that there’s approximately 600,000 not-for-profits in Australia. And about 55,000 registered charities.

So therefore charities are basically a subset of not-for-profits. There are a lot more not-for-profits than there are charities, as I said. An example that we’ve got mentioned here is the sporting clubs around the country. Some of these not-for-profit organisations may well benefit the community, but they don’t fit the legal definition of a charitable purpose. For example, social club, sporting and recreational organisation, and professional or trade groups. These organisations may be not-for-profits, but they’re unlikely to fall within the legal definition of charity as well apply it.

It is very important there to make the point though that we’re not saying there’s anything wrong with any of those organisations, they simply don’t come within the Charities Act.

Chris:

And that’s something we’re going to emphasise I guess a couple of times throughout this Webinar that just because they don’t fall under the Charities Act and thus are not charities, doesn’t mean they’re not legitimate organisations doing good in the community and doing… you know, are worthy or support, I suppose, as well. So you know, we, through the Webinar, we’re going to examine some of the ways that you can check, members of the public can check the legitimacy of charities. So we want to ensure that everyone’s fully aware of the differences before we really kick in. Some things we say in this Webinar will apply to charities, but not to NFPs.

Now, as you can see on the screen here, we’re looking at the ACNC charity register. The charity register is one of these things that only applies to charities. You won’t find non-charitable not-for-profits, as we mentioned before, like the sports club or the social club listed on the charity register. The charity register contains information about 55,000 charities registered with the ACNC. This is one of the tools we recommend to the public for checking the legitimacy of charities as well as gaining other information about charities. Only currently registered charities can legitimately claim that they are registered with the ACNC. This status as a registered charity will appear, and appear pretty prominently, on their page on the charity register.

The charity register is a useful tool because not only does it show if a charity is registered, it also shows other information about the charity as well. Where it operates, who’s on the board, we call them responsible persons, and even copies of their annual reporting to the ACNC. Importantly, it shows if they’re behind in their reporting or if they’ve had their registration revoked. So Heath, why is the charity register such a useful resource for people considering donations?

Heath:

Well, Chris, the charity register is important for people considering donations because it’s a resource that provides some assurance that the charity is registered, that it’s got up to date information available to the public, and that it’s complying with its requirements to report to the ACNC. It’s a great way to check that the charity is the sort of organisation that does what it’s supposed to do. For people that are contemplating donating some money, it’s a great resource to find out about charities. You can look into the details of charities and use the charity register to compliment your research. It isn’t the only thing that you should do when considering a charity to donate to, but it is certainly an important thing to check.

Chris:

Indeed, indeed. Well, we’ll move on from the charity register to a phrase that we’ve mentioned already a couple of times, non-charitable not-for-profits. Now, as we’ve said, non-charitable not-for-profits won’t be on the charity register. Well now, what is a non-charitable not-for-profit?

Heath:

Well as we mentioned earlier, a non-charitable not-for-profit essentially means an organisation that operates on that not-for-profit basis, so it’s not existing to make a profit for its members or board members, but they don’t have a purpose that is considered to be charitable. Therefore, they can’t register with the ACNC as a charity. If you just joined us, we mentioned that that includes, probably the best example, is local sporting clubs. There are many organisations that would fit this description.

Chris:

Now, we’ve mentioned local sporting clubs. So that’s, you know, soccer clubs, footy clubs, cricket clubs, basketball clubs. Other examples might include, say, you know, social, recreational clubs. It might span from something like, say, a knitting group or a craft group to drama groups. Even, say, perhaps a [indistinct 9.43] society, book club. Those sorts of things.

All of these organisations may well operate as not-for-profit, and they also might lean on the financial or even other types of support of donors or supporters. But without the charitable purpose they won’t find themselves registered with the ACNC. Now of course if you want to donate to one of these types of organisations, by all means, do so. Like charities, many of these groups need the support of donations, amongst other things of course, to help them carry out their work. But what is important to note here is that there is no public register which lists these groups or provides their information.

Now, a misconception, and it’s probably an understandable one, some people hope, is that the ACNC has some jurisdiction over not-for-profits. Despite the not-for-profits part of the ACNCs name, we do not regulate non-charitable not-for-profits. And these organisations, again, will not appear on the charity register. So if you’re looking to donate to non-charitable not-for-profits, you’re going to have to do a little bit of homework. You might need to speak to people involved in the organisation that you’re looking to support, maybe check out some websites, do a little bit of desktop research, that type of thing.

Often these types of groups rely on support from those who are already close to the organisation. I’m going to venture into personal anecdote land here and say that I’m a volunteer coach at a local junior basketball club near where I live. My two kids play for the club. My wife is on the club’s committee. Now, the club isn’t a charity, it isn’t able to register as a charity. It is instead a non-charitable not-for-profit. But because, for example, say I know the organisation, I know that it’s reputable, it does a good job, that type of thing, I’ve got no qualms giving to it via my time, maybe even a donation of some goods or equipment or some money even.

Now, lots of people look to give these types of groups. Many of them are legitimate organisations which do good work. Supporting them is fine. But if you’re considering giving to them, do your homework and ensure you’re comfortable with the organisation before you give.

Now, we’re going to venture back into the registered charities role. Another tool that we have with the ACNC is the registered charity tick. Now, you can see an example of it up on the screen. This is a great feature that donors can look for when they’re thinking of giving. The tick is a logo that registered charities can use to show that they are registered with the ACNC. It’s handy because there are times it might not be practical to look up a charity’s listing on the ACNC charity register. You as a member of the public might be out talking to a charity representative in the street, tin rattler, someone like that.

So the presence of the logo on a charity’s pamphlets, documentation, even on its collection tins, it’s a convenient way to see that they are registered. And importantly for those involved in charities, it’s free to download from the ACNC website and use if a charity is registered. So it’s something that we encourage charities to use and to make use of when soliciting donations.

Heath:

Now, it is important to note that not every registered charity will have the registered charity tick on [indistinct 13.09]. It’s a relatively new thing. We’ve only had this for a couple of years. And many charities may not have gotten around to adding it to their pamphlets and posters. So not having the tick on display is not necessarily an indication that the charity is not registered, and that’s important to keep in mind. If it is there, though, it’s a good way to check that the charity is registered. But not being visible isn’t an indication of any wrongdoing.

Chris:

And that last point’s a pretty important one. But the charity tick is something that’s worth some serious consideration. Having this logo on promotional materials is an easy and meaningful way to demonstrate your charity’s registration with the ACNC. It adds credibility to your materials and the information that you might have.

Now, we’re going to look at I guess the importance of checking the, checking the register. The ACNC register, that is. Checking that a charity is registered is important because, as a donor, or a potential donor, it provides people with reassurance that the charity meets the legal definition of charity, operates in a not-for-profit way, so that is, again, that no one benefits privately from the charity’s operations, it has charitable purposes that are for the public benefit, it is run in a way that meets certain standards required by the ACNC.

And we’re going to, we’re going to talk a little bit more about some of the other bits and pieces beyond ACNC standards a little bit later on. But the standards are available on the ACNC website. And the last thing is that it reports to the ACNC each year and has up to date information, including financial information, which is available to the public.

Now, we’ll move onto a pretty important aspect of donating to charity for many people, and that’s tax deduction. Heath.

Heath:

Many people, especially at this time of year, choose to donate to charity and claim the deduction on their own personal tax. And there’s a few things you need to know before you do this. Firstly, a this is important, not all charities are eligible to offer you a tax deduction for a donation. In fact, less than half of the 55,000 registered charities are eligible. Eligibility to offer tax deductions with a donation depends on having deductible gift recipient endorsement from the ATO, commonly called by its initials, DGR. This is a special kind of tax concession that is available to certain charities that meet certain eligibility criteria. If a charity has this endorsement, your donation to them can be claimed back on your personal income tax return as a deduction. There are a bunch of different categories for this endorsement, all administered by the ATO. And some charities will qualify while others will not.

Chris:

That’s, that means that if you’re, if you’re looking to claim back donations, you can’t just claim them back on donations to any charity. It’s only to charities that have the DGR endorsement, isn’t it?

Heath:

That’s right.

Chris:

Yeah. So at this stage the ACNC register does not list whether an organisation has DGR endorsement or not. But you can see this information on the website of the Australian Business Register, which is also known by its initials, the ABR. The website on the ABR, sorry. The ABR website, I should say, which is ABR.business.gov.au. There’s an ABR look up. That’s a search function that will display the tax concessions of an organisation. Now, we would like to mention though that, again, this is not the only reason people donate to charity. Again, many people donate to a cause they want to support first and they might only think about tax concessions later.

And again, for many, the tax concessions aren’t that important. So the search for DGR endorsement might not be relevant in those cases. But if you want to claim back your donation, checking the DGR endorsement is probably something that you will want to do.

So, we’ve gone through bits and pieces and details and non-charitable not-for-profits and charitable and all of that sort of stuff. Some quick tips. Firstly, for charities who are seeking donations. Now, we use the word competitions, probably not the right word. But there’s a lot of charities out there and there’s a lot of them wishing to attract donations. We know that that can be difficult and we know that receiving donations is really important to many charities. Now, while we don’t have all the answers to fundraising, we can suggest a few things that might help a charity attract a donor.

Heath:

People like to know that the charity they donate to is well-run and compliant with its regulatory obligations. Therefore, it’s important to keep your charity’s details up to date and make sure that the annual information statement is submitted on-time each year. People check the charity register for charity details, so it’s crucial that is an accurate reflection of the charity. It’s also a good idea to highlight the charity’s registration with the ACNC.

You can do this in a number of ways.

Make sure it is featured on the charities website and the appropriate documents and communications. Download the registered charity tick and use it on the charity’s website, brochures, and other promotional material. If the charity has deductible gift recipient endorsement, make that known, people like to know that they can claim back donations to charities. And it might even lead to larger donations.

Chris:

Absolutely.

Heath:

It is also important to note that your charity should go further than just complying with the ACNC requirements. Conducting yourself in a transparent way is very important to a lot of donors. And this means doing things like responding to phone calls, providing receipts for donations, especially if you’re a registered deductible gift recipient, and being willing to answer questions about the work you’re doing. It also means complying with reasonable community standards around advertising, employment law, and occupational health and safety.

What about some tips for donors, Chris?

Chris:

Alright. There’s some there on the screen. No, I’ll expand on some of these points. The donors looking to make sure they’re donating to legitimate charities, as we’ve said throughout the Webinar, check the ACNC charity register. Looking for the registered charity tick is another important thing to do, especially if you’re out and it isn’t practical to check the charity register. If tax deductions are important to you as a donor, wander to the ABR to see if the charity you are donating to has the endorsement.

Now, it’s a little bit different if you’re looking for a charity to donate to… he’s says, stumbling over his words. If you’ve got a desire to donate but just don’t know say which charity you want to donate to or to what cause you wish to donate to, you can use the charity register as I guess a handy search functions to search for charities doing work in a certain area. There is another tool, though, that we haven’t mentioned that might be more useful in this case.

Each year, the ACNC undertakes research on the charity sector and publishes the findings on a website, and that website is AustralianCharities.ACNC.gov.au. That also publishes, well we also publish, that information in a report. Part of this research is an interactive database which appears on our website, and analyse members of the public to explore the charity sector in greater detail. Now, the good thing about it is you can look up details of charities in a particular area, geographic area, or according to a charitable purpose, their charity size, and many more categories. You can slice and dice the data to suit yourself and it’s, look, it’s well worth the look. It’s a very, very informative site. Very, very informative research. But from a donations point of view, the tool can be used to look for a charity. It is easy to use, excuse me. And provides very, very good information that isn’t available on the charity register.

Now, we’ve got our, a little bit more information there which we’ll wander back to and we’ll mention.

We did have a couple of questions that we’ve been asked in the lead-up to this Webinar, which we’ll quickly go through. We’re nearing the end of things. We’re blowing through it rather quickly, which is lovely.

First question we did receive was, we had someone say to us that they’ve donated to charities during this financial year and also a couple of local clubs that are not-for-profit, but not charities. They’ve asked about whether they can only claim back the money they give to charities. Now, you probably know the answer. The answer is, you can only claim back the donations to organisations that are eligible to offer deductible donations. Organisations endorsed as DGRs by the Australian Taxation Office, that’s, they pretty much fit the bill there. Now, for more information on that, you can speak to the NFP team at the tax office. They’re very helpful. Their phone number is 1300 130 248. You can have a word to them for more information.

Now, another question we had, it comes into I guess, and Heath will know, it comes into the advice services team pretty frequently. And it sort of surrounds what happens if an organisation sort of claims to be a charity but they’re not on the charity register and the question that is often asked is, should I donate to them?

Heath:

Yeah, or a variation on that might be, they already did.

Chris:

That’s the other variation.

Heath:

And have I done something wrong? The starting point to answer to that question is that we’re not going to tell you who you should or should not donate to. That is absolutely up to you and you should donate to organisations that you agree with, that you want to donate to. That’s your decision. That said, if an organisation is registered as a charity, that means that it has applied for registration and it is reporting to us and there’s information available on the charity register. If the organisation is not registered as a charity, which could be either because it is simply not an organisation that has a charitable purpose, or it may be that they’ve chosen not to apply. If they are not registered as a charity, they have not reported to us. So we’re not at all telling you that you should not donate to the local sporting club or any other organisation that’s not registered, but we do say that we’ll encourage you to do your own investigations into that organisation and make sure it’s something you’re happy to give money to.

Chris:

And that’s the key, that’s the key there. That the information about those types of organisations isn’t going to be the stuff that appears on the ACNC website on the charity register. They’re the sorts of things that if you wish to donate to these groups, it’s almost beholden on you before you give away your hard-earned to an organisation to do that little bit of homework and that little bit of research.

Heath:

But you’re certainly not doing anything wrong.

Chris:

That’s right. Now, up on the screen we have, what have we got? We’ve got six website. Now, there’s some links there that go to bits and pieces around the ACNC website. And there’s some links there that go to the, there’s the ABR link. And there’s also an ATO link to the, to all the bits and pieces about claiming tax deductions, DGR, that sort of thing. These are all worth a look if you want a bit more information. Again, don’t stress if you don’t get them all jotted down, although it’s a shorter list than what we usually offer at the end of the Webinar. We’ll get this information to you in an email in the coming couple of days. Now, there’s some ways that you can stay in touch with us, too, via our site, via other contact details, various other things that we do. Guess what? Are those hours correct? Yes, they are. Yes, it’s five PM now, this is good.

Heath:

We don’t end until five PM. That’s right.

Chris:

This is excellent, good. We had an issue with the last one where the hours weren’t correct, so we’ve gotten that right now. That’s our, that’s our support line to advice services. So if you want to ring them, it’s in until five PM, there you go. Also, keep in touch via the commissions column, email updates, our social media, Facebook, Twitter, YouTube, all those sorts of things. Now, we’re just about done. Thanks to everyone who’s joined us today. Feel free to visit the ACNC website at ACNC.gov.au/webinars. There you can see all the upcoming Webinars we have, you can sign, register for free to attend, that sort of thing. We’ve got two of them coming up in July for starters, so I’m going to be, we’re going to be busily pulling them together over the next little bit.

Thanks so much to Simone for helping us out today. Big thanks to Heath as well for joining us and sharing his insights.

Heath:

Thank you, Chris.

Chris:

And yeah, from all of us here, have a great day, we’ll see you next time. Thank you.

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