Key reform in the NFP space regarding DGR status
The Treasury Laws Amendment (2021 Measures No. 2) Bill 2021 (Bill) has introduced a key reform in the Not-For-Profit (NFP) space in relation to Deductable Gift Recipient (DGR) status.
A DGR is an organisation with a tax type that allows donors to make tax deductible gifts of over $2 to the organisation. This is a major incentive for donors, especially given that some grant makers and other organisations can only donate to organisations with DGR status.
From 14 December 2021, all funds, authorities or institutions seeking DGR endorsement must be one of the following:
a registered charity;
an Australian government agency; or
operated by a registered charity or an Australian government agency.
Existing DGRs and existing DGR applicants will have an additional 12 months (and in some cases, four years) after that time before the amendments apply. Affected entities will need to register as a charity with the ACNC and comply with reporting obligations and governance requirements.
This change is most relevant for organisations that have DGR status via registration on one of the registers run outside the ACNC, including the Register of Cultural Organisations (ROCO) and Register of Environmental Organisations, but are not registered as a charity with the ACNC.
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Current law |
New law |
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Certain funds, authorities and institutions are not required to be a registered charity or an Australian government agency, or operated by a registered charity or an Australian government agency to be entitled to DGR endorsement. |
A fund, authority or institution must be a registered charity or an Australian government agency, or operated by a registered charity or an Australian government agency, to be entitled to DGR endorsement. |
Key takeaways
Previously, operators of a fund, authority or institution were not required to be a registered charity to be entitled to DGR endorsement. The Bill has now received royal assent and from 14 December 2021, it will be a requirement that such entities are registered with the ACNC in order to qualify for DGR endorsement.
If you are a DGR organisaiton that is not registered with the ACNC, or involved in the not-for-profit space and want to know more about your organisation’s governance, please don’t hesitate to get in contact with us.
Ryan Popovski
Graduate Lawyer
T: 03 5226 8572
E: rpopovski@ha.legal
Hugo Le Clerc
Lawyer
T: 03 5225 5213
E: hleclerc@ha.legal
Paul Gray
Principal
T: 03 5225 5231 | M: 0414 195 886
E: pgray@ha.legal
