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Basic eligibility requirements
It appears that your organisation meets the basic eligibility requirements to apply for DGR status.
This means that your organisation is an Australian not-for-profit organisation with an Australian business number and an appropriate DGR winding up clause in its governing document (rules, constitution or trust deed).
Basic eligibility requirements
Your organisation does not appear to meet the basic eligibility requirements to apply for DGR status.
To be eligible, your organisation must be an Australian not-for-profit organisation with an Australian business number and an appropriate DGR winding up and revocation clause in its governing document (rules, constitution or trust deed).
While this report may identify a DGR category relevant to your organisation, your organisation will need to meet the eligibility requirements set out above before you can obtain DGR status.
Common deductible gift recipient categories
This tool covers some of the more common deductible gift recipient (DGR) categories.
Your organisation does not appear to fall into one of the DGR categories covered by this tool.
A less common category may be relevant to your organisation.
For information on all available categories, see the Australian Tax Office (ATO) website.
For general information on DGR endorsement, see our free DGR guide.
The Register of Cultural Organisations category
The Register of Cultural Organisations (ROCO) category appears to be a category relevant to your organisation.
The ROCO exists to promote the arts and Indigenous languages, and to help organisations that do so to access deductible gift recipient (DGR) endorsement and attract funding. Australian organisations can be listed on the register if their principal purpose is to promote the arts in Australia, including the creation of a new theatrical work, publishing a literary magazine or building a community arts centre.
This category may include choirs, dance organisations, festivals, theatre organisations and art exhibition venues, however it would exclude public art galleries, museums and libraries as these come under a different category.
Cultural associations, like specific ethnic associations or clubs, may have difficulty getting DGR endorsement if they don’t promote an aspect of the arts specifically (like literature, or film).
Note
This DGR category has been flagged for future reform. To find out more about the proposed reform, visit the Australian Tax Office (ATO) website.
To meet the requirements of this category, your organisation must:
- promote at least one of the following – literature, music, a performing art, a visual art, a craft, design, film, video, television, radio, community arts, Indigenous arts or languages or movable cultural heritage
- express the above as its principal purpose in its governing document (meaning the first or most important purpose where the organisation has more than one purpose), and
- establish and maintain a public fund to receive gifts for its principal purpose
Your organisation may also need to meet other requirements.
The application form for DGR status under the ROCO category is available on the Register of Cultural Organisations website. The application process can be lengthy and may take over 12 months.
For more information about the ROCO category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
The community sheds category
The community sheds category appears to be a category relevant to your organisation. This is a new deductible gift recipient (DGR) category, with organisations able to apply for endorsement from 1 October 2020.
To meet the requirements of this category, your organisation must:
- be registered as a charity with the ACNC
- be a public institution
- have the dominant purpose of advancing mental health and preventing or relieving social isolation (while community sheds may conduct a range of activities, for the purposes of this DGR category, the activities must support the dominant purposes of advancing mental health and preventing or alleviating social isolation)
- include this dominant purpose in your organisation’s governing document (your rules, constitution or trust deed)
- seek to achieve those purposes principally by providing a physical location (your ‘shed’) where the organisation supports people to undertake activities, or work on projects, in the company of others, and
- have open membership (ie. there is no particular criteria for membership for your organisation) or membership that is open to people of a particular gender or with Indigenous heritage, or both.
Note - public institution
'Institutions' have their own distinct identity and actively undertake activities to achieve their purpose (or, if it is a new organisation, has concrete plans for doing so in the near future). An institution must do more than merely hold and distribute funds. Institutions usually carry out activities or provide services directly or collaborate with other charitable organisations (such as in the case of fundraising institutions).
For an institution to be a public institution it must be open to the public (or a sufficient section of the community) and not be carried on for private profit or gain.
Note - dominant purpose
Your organisation must show that it has the dominant purposes of advancing mental health and preventing or relieving social isolation. Any other purpose must either assist in fulfilling the dominant purposes or be incidental to the dominant purpose.
Your organisation then needs to be able to demonstrate the way that it organisation is supporting its dominant purposes.
For example, it could demonstrate that it is advancing mental health by helping members access assistance or information, or by inviting guest speakers to talk on mental health issues.
The purpose of addressing social isolation could be demonstrated by the community shed welcoming a broad range of people to join in its activities, or by actively promoting social connection.
Community sheds may have open membership (meaning that there is no particular criteria for membership for your organisation) or membership that is open to people of a particular gender, with Indigenous heritage or both. This means community sheds may include men’s sheds, women’s sheds, Indigenous peoples’ sheds, Indigenous men’s sheds or Indigenous women’s sheds.
Organisations that are unlikely to be eligible under this category are organisations that are for people of a particular age, for ex-service personnel or for organisations that don’t have physical premises.
Tip
If your governing document allows the committee to refuse a membership application for any reason, this may make it hard for your application to succeed (it won't satisfy the ‘open’ membership requirement). To meet the open membership requirement, your governing document must have a policy and process in place that clearly demonstrates all new members are nominated and approved without exception.
Charity registration and DGR application
If your organisation is not yet a registered charity and wants to apply for DGR status under this category, it can:
- apply to become a registered charity through the ACNC website, and
- nominate through the charity registration process that it wishes to also seek DGR endorsement
The relevant information will then be sent to the ATO which will assess the organisation for DGR endorsement.
If your organisation is already a registered charity and wants to apply for DGR status under this category, it can lodge an application for DGR endorsement through the Australian Tax Office (ATO) website.
For more information about the community sheds category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
The animal welfare charity category
The animal welfare charity category appears to be a category relevant to your organisation.
The animal welfare charity category helps organisations that protect and care for animals that have been lost, mistreated or are without owners to access deductible gift recipient (DGR) endorsement and attract funding.
The meaning of animal for this category is broad and includes land animals, reptiles, birds, fish and other aquatic animals.
This category excludes a standard veterinary clinic that assists animals that have owners.
But organisations with a principal activity of advocating for better treatment of animals generally or advocating for vegan lifestyles would be unlikely to be eligible under this category.
To meet the requirements of this category, your organisation must:
- be a registered charity with the ACNC
- conduct activities that are not limited to native wildlife, and
- as its principal activity, provide short-term direct care to animals that have been lost, mistreated or are without owners, or rehabilitate orphaned, sick or injured animals that have been lost, mistreated or are without owners
Note
The principal activity is the main activity conducted by the organisation. Determining the principal activity includes considering factors such as the involvement of staff and volunteers, the number and type of services provided, costs, and the use of facilities and resources. For example, if a charity has four activities that take up 10% of its time and resources (each) and a fifth activity that takes up 60% of its time and resources, the fifth activity will be considered its ‘principal activity’.
The organisation can still provide veterinary services for pets and working animals, promote the prevention of cruelty to animals and operate boarding kennels, if these are secondary activities.
Examples of activities that may be short-term direct care include:
- veterinary services for animals' injuries and illnesses
- recovery, first aid and transport of injured animals,
- washing and grooming lost animals and ridding them of fleas and ticks
- feeding and sheltering animals in the short term while their owners are contacted or new homes are found
If animals are not recovering from injury or sickness and are not in need of rehabilitation, ongoing care for them will not qualify.
Charity registration and DGR application
If your organisation is not yet a registered charity and wants to apply for DGR status under this category, it can:
- apply to become a registered charity through the ACNC website, and
- nominate through the charity registration process that it wishes to also seek DGR endorsement
The relevant information will then be sent to the ATO which will assess the organisation for DGR endorsement.
If your organisation is already a registered charity and wants to apply for DGR status under this category, it can lodge an application for DGR endorsement through the Australian Tax Office (ATO) website.
Your organisation will also be required to submit a prescribed schedule with your application.
For more information about the animal welfare charity category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
The Register of Environmental Organisations category
The Register of Environmental Organisations category appears to be a category relevant to your organisation.
An environmental organisation is an organisation with the principal purpose of protecting or enhancing the natural environment.
Organisations on the Register under this category include those involved in land, wildlife and rainforest conservation. The activities underlying an environmental organisation's principal purpose must relate to the natural environment as distinct from other types of environments.
Examples of organisations in this category include organisations or funds established to:
- promote rainforest conservation
- provide education on climate change
- promote awareness of an endangered species
- work with volunteers to deliver a cleaner environment, and
- conserve native wildlife in a particular region
Note
This DGR category has been flagged for future reform. To find out more about the proposed reform, visit the Australian Tax Office (ATO) website.
To meet the requirements of this category, your organisation must:
- have a principal purpose of either – the protection and enhancement of the natural environment or a significant aspect of the natural environment, the provision of information or education about the natural environment or a significant aspect of the natural environment, or the carrying out of research about the natural environment or a significant aspect of the natural environment
- list its formal objects in relation to the principal purpose above in its governing document
- be registered on the Register of Environmental Organisations (maintained by the Department of Agriculture, Water and the Environment), and
- establish and maintain a public fund
Your organisation may also need to meet other requirements.
Note
A public fund is established to hold and distribute money without carrying out charitable activities (it doesn’t conduct activities). The public is invited to contribute to the fund and it must be overseen by a committee made up of a majority of people who have a degree of responsibility to the community (such as a school principal, doctor or solicitor). Some deductible gift recipient (DGR) categories require organisations to establish a public fund to receive tax deductible gifts and contributions. A separate bank account and clear accounting procedures are required for public funds.
The application form for DGR status under the Register of Environmental Organisations category is available on the Department of Agriculture, Water and the Environment website. The application process can be lengthy and may take over 12 months.
For more information about the Register of Environmental Organisations category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
The public fund for persons in necessitous circumstances category
The public fund for persons in necessitous circumstances category appears to be a category relevant to your organisation.
A necessitous circumstances fund is a public fund established and maintained for the relief of people in Australia who are in ‘necessitous’ circumstances.
Note
A public fund is established to hold and distribute money without carrying out charitable activities (it doesn’t conduct activities). The public is invited to contribute to the fund and it must be overseen by a committee made up of a majority of people who have a degree of responsibility to the community (such as a school principal, doctor or solicitor). Some deductible gift recipient (DGR) categories require organisations to establish a public fund to receive tax deductible gifts and contributions. A separate bank account and clear accounting procedures are required for public funds.
Note
The term 'necessitous circumstances' refers to financial necessity.
A person is in necessitous circumstances if they don't have enough financial resources to have a modest standard of living in Australia. An indicator of this would be where a person's level of income is such that they are eligible to receive income-tested government benefits. Some needs (such as sickness or disability) are non-financial but can cause financial need and therefore may fall within this category.
Necessitous circumstances don’t extend to needs generally - for example, being sick, incapacitated or aged are not necessitous circumstances on their own. Furthermore, the circumstances giving rise to financial necessity don’t need to be permanent. For example, tropical cyclones, floods and other disasters can cause people to be in short-term financial need.
The necessitous circumstances fund distributes goods or money to people who don’t have the financial resources for all necessities.
Example
Andy was 16 years old when he jumped from a pier at the beach and was permanently incapacitated. He will need full time care for the rest of his life. Andy had no insurance and his parents can’t meet the costs of his care. The local community sets up a fund and raises money to pay for necessary modifications to Andy’s home and for the services of a carer. The fund is a necessitous circumstances fund.
To meet the requirements of this category your organisation must:
- be a public fund
- provide relief to persons located in Australia, and
- not provide benefits to persons who are not in necessitous circumstances
Your organisation can lodge an application for DGR endorsement through the Australian Tax Office (ATO) website.
For more information about the public fund for persons in necessitous circumstances category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
The health promotion charity category
The health promotion charity category appears to be a category relevant to your organisation.
A health promotion charity is a charity with the principal activity of promoting the prevention or control of diseases in human beings.
A health promotion charity can undertake other activities, but promoting the prevention or control of disease in human beings must be its main activity. It’s usually not enough to be a health-related charity or to promote ‘health’ or ‘wellbeing’ generally.
‘Disease’ includes physical and mental illness, but it is required to be something more than a health condition or symptom. Your organisation must specify the disease or diseases that will be prevented or controlled through its principal activity.
Note
Charities in this category are not required to have the charitable purpose of advancing health. For example, a charity with the purpose of advancing education about a disease can be a health promotion charity.
This category is likely to include charities involved in:
- raising awareness about a disease, its causes and measures that can be taken to guard against contracting it (such as immunising against it)
- acting to reduce the spread of a disease
- researching the management and treatment of diseases
- managing and treating diseases, and
- acting to alleviate the suffering or distress caused by a disease
Activities that are unlikely to fall into this category include organisations that:
- promote healthy lifestyles (for example, the importance of healthy eating and regular exercise), or
- promote a particular type of exercise due to its general health benefits
Note
This category is narrower than the Australian Charities and Not-for-profits Commission (ACNC) category for registered charities with ‘the purpose of advancing health’ as the ACNC category includes organisations that aim to improve general health.
To meet the requirements of this category, your organisation must:
- be a registered charity under the 'health promotion charity' subtype
- be an institution, and
- promote the prevention or the control of disease in human beings as the organisation’s principal activity
Note
An institution has its own distinct identity and actively undertakes activities to achieve its purpose (or, if it is a new organisation, has concrete plans for doing so in the near future). An institution must do more than merely hold and distribute funds. They usually carry out activities or provide services directly or collaborate with other charitable organisations (such as in the case of fundraising institutions).
Note
The principal activity is the main activity conducted by the charity, or the activity that it conducts more than any other. A health promotion charity can undertake other activities, but promoting the prevention or control of disease in human beings must be its main activity. For example, if a charity has four activities that take up 10% of its time and resources (each) and a fifth activity that takes up 60% of its time and resources, the fifth activity will be considered its ‘principal activity’.
Charity registration and DGR application
If your organisation wishes to apply for DGR status under this category, it can apply to become a registered charity through the ACNC website and nominate through the charity registration process that it wishes to seek this DGR endorsement. The ATO will accept that an organisation is a health promotion charity if it is registered by the ACNC as health promotion charity.
For more information about the health promotion charity category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
The harm prevention charity category
The harm prevention charity category appears to be a category relevant to your organisation.
A harm prevention charity is a registered charity with the primary activity of promoting the prevention or control of ‘behaviour that is harmful or abusive to human beings’.
Harmful or abusive behaviour is defined to mean emotional abuse, sexual abuse, physical abuse, substance abuse, self-harm, suicide or harmful gambling.
A harm prevention charity can provide direct support through counselling or workshops, or indirect support through community education and awareness-raising. The principal activity must directly contribute to the promotion, prevention or control of ‘behaviour that is harmful or abusive to human beings'.
Examples of this category include:
- an organisation established for suicide prevention
- an organisation founded to educate school students on the prevention of emotional abuse and physical abuse
- a charity that delivers education programs designed to prevent harmful gambling
Activities that are indirect or too removed or unrelated to the harmful behaviour may not qualify for DGR status under this category.
Note
To be endorsed as a deductible gift recipient (DGR) by the Australian Tax Office (ATO), a harm prevention charity must be entered onto the Register of Harm Prevention Charities. The Register is maintained by the Department of Social Services (DSS).
Before applying to be onto the Register of Harm Prevention Charities, an organisation must be registered with the Australian Charities and Not-for-profits Commission (ACNC).
Note
This DGR category has been flagged for future reform. To find out more about the proposed reform, visit the Australian Tax Office (ATO) website.
To meet the requirements of this category:
- your organisation must be registered as a charity with the ACNC
- your organisation’s principal activity must be the promotion of the prevention or control of human behaviour that is harmful or abusive to human beings,
- your organisation must establish and maintain a public fund to which gifts of money or property are made, along with a public fund management committee, and
- your organisation’s governing documents must include model rules relating to the Public Fund and the harm prevention charity which are outlined in the Register of Harm Prevention Charities guidelines
Note
The principal activity is the main activity conducted by the charity, or the activity that it conducts more than any other.
Note
A public fund is established to hold and distribute money without carrying out charitable activities (it doesn’t conduct activities). The public is invited to contribute to the fund and it must be overseen by a committee made up of a majority of people who have a degree of responsibility to the community (such as a school principal, doctor or solicitor). Some deductible gift recipient (DGR) categories require organisations to establish a public fund to receive tax deductible gifts and contributions. A separate bank account and clear accounting procedures are required for public funds.
Once an institution and its public fund have been entered on the Register of Harm Prevention Charities, it is then eligible for endorsement as a DGR.
To apply for DGR endorsement, the registered charity must complete an application form for entry onto the Register of Harm Prevention Charities and send to the DSS.
The DSS will assess the application, and if the charity is accepted onto the Register, the DSS will send the form on to the ATO to process the DGR endorsement.
The application process can be lengthy and may take over 12 months.
For more information about the harm prevention charity category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
The public benevolent institution category
The public benevolent institution (PBI) category appears to be a category relevant to your organisation.
Don’t get put off by the language here – it's old fashioned. It may not fit well with the language you prefer to use. For example, the people your organisation helps might not like to be talked about as ‘sufferers’ or being ‘helpless’, but for the purpose of working out your organisation’s eligibility for DGR status, we must use this language.
Note
The Australian Charities and Not-for-profits Commission (ACNC) is responsible for determining PBI status. If an organisation is registered by the ACNC as a PBI, it can apply to the ATO and may be endorsed as a deductible gift recipient (DGR) for tax purposes.
A PBI is a registered charity with the dominant purpose of providing benevolent relief to people in need.
Benevolent relief includes the relief of poverty, sickness, destitution or helplessness. Providing benevolent relief means that your organisation provides targeted relief for people suffering or in distress. The ACNC recognises the situation of Australia’s Indigenous peoples and their disadvantage. It therefore may recognise an organisation with the purpose of addressing Indigenous disadvantage as being a PBI, along with organisations that seek to promote and protect indigenous culture.
Examples in this category may include:
- disability support services
- some not-for-profit homes for the aged
- housing bodies that provide low rental or subsidised accommodation to underprivileged persons affected by poverty, sickness or disability
The ‘public’ element
If your organisation assists a person rather than a section of the community who need assistance (‘people in need’), then it can’t demonstrate the ‘public’ element required of a public benevolent institution. Here, your organisation may wish to find out more about the ‘necessitous circumstances fund’ category for DGR.
Alternatively, where the purpose of your organisation is to benefit the community as a whole, then this may be considered to be too general for the PBI category.
Note
Your organisation must be able to show that it’s helping people who have a need that it is significant enough to arouse the compassion of people in the community and that goes beyond the suffering experienced as part of the ordinary human experience.
Failure, loss of status or reputation and even bereavement are not considered to be serious enough to require benevolent relief, but a parent losing a child may be eligible.
All the organisation’s purposes as set out in its governing documents need to be directed to providing the benevolent relief, and the relief must be specifically targeted to the people who are in need rather than directed at the community more generally.
In addition, the group who is suffering must be clearly identified in your organisation’s purposes, and the support must be provided for the issue that they are suffering from.
For fundraising organisations seeking PBI endorsement, the organisation can provide the relief by, or in coordination with, another organisation and is not required to provide the relief itself.
Fundraising
An organisation whose main activity is fundraising can be registered as a PBI if it can demonstrate:
- clear objects of benevolent relief – the group receiving the relief must be recognisably in need, and the relief must be specifically targeted to the people who are in need rather than directed at the community more generally
- clear mechanisms for delivering the benevolent relief – for fundraising institutions, there must be a clear path to delivery of the relief for which the funds are raised
- a relationship of collaboration or a common public benevolent purpose – the fact that fundraising organisations raise funds for other organisations and don’t provide the relief themselves would not be a barrier to becoming a PBI provided there is a clear relationship of collaboration between the organisation raising the funds and the organisation delivering the aid
Organisations that seek to provide general advice, information or services to the whole or part of a community are unlikely to be considered PBIs.
Operating overseas
If your organisation provides development or humanitarian assistance activities overseas, you may wish to consider the overseas aid gift deduction scheme (OAGDS) category. Under this category, it’s a requirement for eligibility that organisations implement these activities in one of the countries listed by the Minister for Foreign Affairs as a developing country.
Note that:
- it can be more difficult to successfully apply for OAGDS
- there is a higher level of required compliance, and
- not all of the tax benefits available under the PBI category are available under the OAGDS
Additionally, for organisations that conduct activities overseas, you should ensure that you comply with the External Conduct Standards (ECS). See the ACNC website for more information about the ECS.
Charity registration and DGR endorsement
A new charity may be eligible for PBI status if it can demonstrate that it has clear plans to operate in the foreseeable future or within one year of establishment. It can show this through the provision of a business, operational or strategic plan outlining what it proposes to do and how it proposes to execute the plan. It may also demonstrate its intention to operate through provision of an agreement with another party outlining how the organisations intend to work together to provide the relief.
To meet the requirements of this category your organisation must:
- be an institution,
- provide benevolent relief to people in need (organisation must identify who is suffering and provide support for the issue that they are suffering from)
- have providing benevolent relief to people in need as your organisation’s main purpose in its governing document, and
- be a registered charity with the ACNC, with the charitable sub-type of ‘public benevolent institution’
Note
An institution has its own distinct identity and actively undertakes activities to achieve its purpose (or, if it is a new organisation, has concrete plans for doing so in the near future). An institution must do more than merely hold and distribute funds. They usually carry out activities or provide services directly or collaborate with other charitable organisations (such as in the case of fundraising institutions).
Note
The main purpose of an organisation is its sole purpose (as stated in its governing document).
To apply to become a PBI with the ACNC, follow the application instructions through the ACNC charity portal.
For more information about the PBI category see:
Note – This report is legal information only and not legal advice. Your organisation should seek legal advice if you are unsure whether it would qualify for DGR status.
