Philanthropy provides funds and other assistance for causes which promote health, education, assistance in times of natural disaster and other areas. There are many considerations when setting up a charity to advance education – such as the type of structure to set up (should you use a trust, or a company limited by guarantee) and dealing with the Australian Charities and Not for Profit Commission (ACNC).

One main consideration which every person setting up a charity has likely considered at some stage is getting endorsed as a deductible gift recipient (DGR) by the Australian Taxation Office. If you’re DGR endorsed, this means that people who give to your charity get a tax concession, and the thinking goes that people are more likely to donate to your charity, if they are eligible for a concession. However, achieving DGR is not simple – there are a number of hurdles to jump before the ATO will endorse you.

What Categories of Organisations Does the ATO Endorse?

There are 40 categories the ATO endorses for the purposes of DGR.

These are (in no particular order):

  • Animal welfare charities
  • Australian disaster relief funds
  • Developed country disaster relief funds
  • Necessitous circumstances funds
  • Overseas aid funds
  • Private ancillary funds
  • Public ancillary funds
  • Public hospitals
  • Public libraries, museums and art galleries
  • Public universities
  • Registered health promotion charities
  • Registered public benevolent institutions
  • Scholarship funds
  • School building funds
  • Volunteer fire brigades

If you want to receive the benefits of DGR registration, your charity or organisation needs to fall within one of these categories.

Can My Educational Charity Receive DGR Endorsement?

‘Advancing education’ is a charitable purpose as defined by section 12 of the Charities Act 2013 (Cth). While your organisation may be able to be registered as a charity by the ACNC, this does not guarantee the ATO will endorse you for DGR status. This is because the types of educational charities and organisations that are eligible to receive DGR status are extremely limited.

The ATO states that the following educational charities and organisations can receive DGR status.

  • Public universities
  • Public funds for the establishment of a public university
  • Higher education institution (e.g. a school, within the meaning of the Higher Education Support Act 2003 (Cth))
  • Residential educational institution
  • Commonwealth residential educational institution
  • Affiliated residential educational institution
  • TAFE (under the Student Assistance Act 1973 (Cth))
  • Public fund for religious instruction in government schools
  • Roman Catholic public fund for religious instruction in government schools
  • Public fund for ethics education in government schools
  • School building fund
  • Public fund for rural school hostel building
  • Government special school
  • Scholarship Fund
  • Life education company

This exhaustive list of education-related charities and organisations shows that it might be onerous for a charity whose purpose is to advance education to receive DGR status. Many of the organisations on the list are strictly defined by legislation – e.g. TAFE under the Student Assistance Act 1973 (Cth). Those who are relying on receiving DGR endorsement from the ATO to encourage charitable giving might have to assess their funding model, to broaden their source of income in case DGR endorsement is not an option.

Key Takeaways

In summary, while an organisation may be registered as a charity under the Charities Act 2013 (Cth) by the ACNC, this does not guarantee the organisation will receive DGR endorsement by the ATO. DGR endorsement means that any person donating to the organisation will receive a tax deduction – acting as an incentive to donate charitably. To be DGR endorsed, your organisation needs to fall within a number of strictly defined categories.

If you have questions about whether your charity is eligible for DGR status, check the ACNC website.

Chloe Sevil
If you would like further information on any of the topics mentioned in this article, please get in touch using the form on this page.
  • We will be in touch shortly with a quote. By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
If you would like to receive a free fixed-fee quote for a legal matter, please get in touch using the form on this page.
  • We will be in touch shortly with a quote. By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.

Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy