Deductible gift recipientsVersion: 9.9.7

DGR endorsement

Only certain organisations are entitled to receive income tax deductible gifts and tax deductible contributions. They are called Deductible Gift Recipients (DGRs).

All DGRs have to be endorsed by the ATO unless they are listed by name in the income tax law. There are two types of DGR endorsement:

  • where an entity is endorsed as a whole, for example, public hospitals or public universities
  • where an entity is endorsed for the operation of a fund, authority or institution that it owns or includes, for example, school building funds or council libraries.

For the second type, only gifts to the fund, authority or institution are tax deductible.

For more information vist the not-for-profit External site page on the ATO website.

Item numbers

The income tax law specifies the funds, authorities or institutions that may be DGRs. The table in section 30-15 of the Income Tax Assessment Act 1997 External site identifies them as follows:

  • Item 1 refers you to lists of funds, authorities and institutions such as public hospitals, overseas aid funds and public museums (including entities listed by name).
  • Item 2 are called ancillary funds and describes funds set up solely for:
    • providing money, property or benefits for Deductible Gift Recipient (DGR) covered by item 1, or
    • the establishment of such DGRs.
  • Item 4 describes funds, authorities or institutions that may receive donations of property under the Cultural Gifts Program.

This information helps:

  • ancillary funds check whether a DGR is covered by item 1
  • donors check whether a DGR may receive donations of property under Cultural Gifts Program.

Private ancillary fund

A private ancillary fund (private AF) is a trust fund where:

  • all the trustees of the trust are constitutional corporations
  • all the trustees have agreed to comply with the Private Ancillary Fund Guidelines.
  • none of the trustees has revoked that agreement.

Private AFs are established by private groups, such as businesses, families and individuals for philanthropic purposes. To receive tax deductible gifts a private AF must be endorsed by the ATO as a Deductible Gift Recipient (DGR).

Private AFs are limited to making distributions to DGRs covered by item 1 in section 30-15 of the Income Tax Assessment Act 1997 External site or for the establishment of such DGRs.

Find out more about types of not-for-profit organisations External site on the ATO website.

Public ancillary fund

A public ancillary fund (public AF) is a trust fund where:

  • at least one of the following applies
    • all the trustees of the trust are constitutional corporations
    • the only trustee is the Public Trustee of a State or Territory or is prescribed by the regulations
  • all the trustees have agreed to comply with the Public Ancillary Fund Guidelines.
  • none of the trustees has revoked that agreement.

Public AFs are established for philanthropic purposes. To receive tax deductible gifts a Public AF must be endorsed by the ATO as a Deductible Gift Recipient (DGR).

Public AFs are limited to making distributions to DGRs covered by item 1 in section 30-15 of the Income Tax Assessment Act 1997 External site or for the establishment of such DGRs.

Find out more about types of not-for-profit organisations External site on the ATO website.

Community charity trust

A trust is a community charity trust (CCT) if:

  • it is specified in a ministerial declaration in force
  • all of its trustees are constitutional corporations
  • all of its trustees have agreed to comply with the rules in the Community Charity Guidelines as in force from time to time
  • none of its trustees have revoked that agreement.

To receive tax deductible gifts, a CCT must be registered as a charity with the ACNC and endorsed by the ATO as a Deductible Gift Recipient (DGR).

CCTs are required to make distributions each financial year except in the financial year the CCT is established or during the following 4 financial years. A CCT can make distributions by:

  • providing money, property or benefits to DGRs other than an ancillary fund, a CCT or a community charity corporation in the direct course or furtherance of its purposes
  • incurring certain expenditure in the direct course or furtherance of its purposes.

CCTs may also provide money, property or benefits to establish a DGR, other than an ancillary fund, a CCT or a community charity corporation.

Find out more about CCTs on the ATO website at Not-for-profit organisations | Australian Taxation Office External site

Community charity corporation

A company is a community charity corporation (CCC) if:

  • it is specified in a ministerial declaration in force
  • it is either:
    • a constitutional corporation
    • a body corporate that is not a constitutional corporation
  • each of its directors have agreed to comply with the rules in the Community Charity Guidelines as in force from time to time
  • none of its directors have revoked that agreement.

To receive tax deductible gifts, a CCC must be registered as a charity with the ACNC and endorsed by the ATO as a Deductible Gift Recipient (DGR).

CCCs are required to make distributions each financial year except in the financial year the CCC is established or during the following 4 financial years. A CCC can make distributions by:

  • providing money, property or benefits to DGRs other than an ancillary fund, a community charity trust or a CCC in the direct course or furtherance of its purposes
  • incurring certain expenditure in the direct course or furtherance of its purposes.

CCCs may also provide money, property or benefits to establish a DGR, other than an ancillary fund, a community charity trust or a CCC.

Find out more about CCCs on the ATO website at Not-for-profit organisations | Australian Taxation Office External site

Top