Community charities can now be endorsed as Deductible Gift Recipients
On 29 June 2024, the Commonwealth tax law was changed so that ‘community charities’ can now be endorsed as Deductible Gift Recipients.
To be eligible , a community charity:
- must be either a trust (or a body corporate;
- must have the mandatory purposes of:
- providing money, property or benefits to an item 1 DGR that is not a community charity (ie another existing DGR)and
- engaging in direct activities that would be the principal activity or purpose of an item 1 DGR that is not a community charity (eg assisting the poor);
- may have the permitted purpose of establishing another DGR that is not a community charity;
- must be specified, in a Ministerial declaration, as a ‘community charity trust’ or a ‘community charity corporation’;
- must agree to comply with prescribed guidelines’; and
- must comply with other governance, procedural and administrative requirements applying to community charities.
From 5 November 2024 to 3 December 2024, the Commonwealth Treasury engaged in consultation in relation to an exposure draft of the Taxation Administration (Community Charity) Guidelines. If and when the exposure draft of the Guidelines is adopted by the Commonwealth Government, community charities will generally be run in a similar fashion to Public and Private Ancillary Funds.