Reading time: 3 minutes

Charities are governed by the Charities Act 2013 (Cth) (the Act) and for an organisation to be a charity, it must have a ‘charitable purpose’ as defined by section 12 of the Act. ‘Advancing health’ is a charitable purpose under the Act. DGR (deductible gift recipient) endorsement is attractive to many people wishing to set up a health charity. Anyone who donates to a charity which is DGR endorsed or otherwise endorsed by the ATO can receive income tax exemptions, and the charity itself can receive GST charity concessions, fringe benefit tax (FBT) rebates and FBT exemptions. This is a significant advantage if you’re trying to establish a charity from the ground up.

Australian Taxation Office Endorsement

The ATO doesn’t just endorse organisation for DGR status – the ATO also endorses organisations for the Tax Concession Charity (TCC) endorsement.

TCC is an endorsement where an organisation can access charity tax concessions (e.g. income exemption, GST concessions and FBT concessions.

DGR endorsement makes an organisation eligible to receive tax-deductible gifts and tax-deductible contributions. This means that the person or organisation who donated can claim a tax deduction on their income tax return.

DGR Endorsement

While your charitable health organisation might have a charitable purpose under the Act and be able to be registered with the ACNC, this does not necessarily mean it will be eligible for DGR endorsement with the ATO.

If you are a charity which advances health, to receive DGR endorsement you must fall within one of the categories listed by the ATO as eligible for endorsement.

The categories are:

  • Public hospitals
  • Hospitals carried on by a society or organisation
  • Public funds for hospitals
  • Public authority for research
  • Public institution for research
  • Registered health promotion charity
  • Public ambulance services
  • Public funds for public ambulance services.

Is your organisation a public ambulance service? Is it a public fund for a hospital? The categories listed by the ATO as eligible for DGR endorsement are extremely limited. If you’re intending on setting up a charity and want to rely on tax deductible gifts receiving due to your DGR endorsement, you should assess your funding model to determine whether the charity has other funding options. As demonstrated by the list of categories, not every health charity can be registered for DGR.

Key Takeaways

In summary, an educational charity registered with the ACNC is not guaranteed DGR endorsement. Organisations such as public hospitals and ambulance services are eligible, but if your organisation falls outside these categories, then it might be difficult to receive DGR endorsement. Review your funding model to ensure that your charity can survive without receive either DGR or TCC from the Australian Tax Office. Receiving these endorsements should be a bonus, but should not be relied upon, if you are establishing a charity.

If you have any questions about obtaining DGR status, see the ACNC DGR Factsheet.


Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards