Deductible Gift Recipient Endorsement
DGR is a kind of ‘special tax status’ that an organisation can apply for. If your organisation is endorsed (officially recognised) by the Australian Tax Office (ATO) as a DGR:
- people who make gifts or donations to your organisation are able to ‘deduct’ those gifts for their own income tax purposes (that is, the donor can claim the donation as a deduction when filing their personal income tax return); and
- your organisation can receive funds from certain grant makers and philanthropic bodies, which are only able to give money to organisations that have DGR status.
So, when you see wording ‘donations over $2.00 are tax deductible’ – the organisation offering this as an incentive to the donor must first be ‘endorsed’ by the ATO as a DGR. In general, unless your organisation is endorsed as a DGR, people donating to your organisation can not claim their donation against their tax.
If your organisation as a whole is not eligible to be a DGR, it may be that certain activities of the organisation could attract DGR status. In these circumstances, it may be worth considering establishing a separate fund or entity, which could be eligible for DGR endorsement. You should seek legal advice on this option.
Not-for-profit Law Guide to Deductible Gift Recipient Endorsement
The Not-for-profit Law Guide to Deductible Gift Recipient Endorsement sets out in more detail information about the categories for endorsement, the application process, and issues that arise in maintaining DGR endorsement.