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Back to "Community & Associations Newsletter, December 2023"

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Productivity Commission Draft Report Released on Philanthropy, Charities and Giving

On 30 November 2023, the Productivity Commission released its draft report in relation to its review of philanthropy, charities and giving, titled ‘Future foundations for giving’. The current review is the latest in a series of reviews and inquiries (spanning at least 20 years) into the regulatory framework applying to Australian charities and not-for-profits. This draft report proposes substantial reforms to this regulatory framework.

Particular recommendations made by the Commission are:

  • Extending Deductible Gift Recipient status to all charities – except:
    • all religious charities;
    • most educational or childcare / aged care-focused charities (unless such educational or childcare / aged care activities are undertaken by a Public Benevolent Institution);
    • charities that promote industry, trade, or commerce; or
    • charities with other analogous purposes to the above.
  • Removing Deductible Gift Recipient status for school building funds and from existing school building funds with current DGR endorsement
  • Developing a legislated definition of “Public Benevolent Institution”;
  • Removing the concept of the ‘basic religious charity’ from the Australian Charities and Not-for-profits Commission Act 2012 (Cth), and all their associated exemptions (i.e. exemptions from the Governance Standards and financial reporting requirements); and
  • Reforming minimum annual distribution requirements for Public Ancillary Funds and Private Ancillary Funds, to improve smoothness and timeliness of giving by ancillary funds to end recipients.

We stress that this is only a draft report. There will be further debate, including from faith-based and education charities, regarding the implications of the draft recommendations – if, in fact, they are reflected in the Productivity Commission’s final report. The final report is due by May 2024 and will then be subject to consideration by the Commonwealth (which may delay further any reforms).

Submissions on the draft report are due by Friday, 9 February 2024. Submissions are open to the general community. Carroll & O’Dea Lawyers intend to file a submission so if there are matters you would like us to include, please let us know.

Josephine Heesh, Partner

Samuel Chu, Solicitor 

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