During Ramadan in Australia, there is typically a surge in charitable donations throughout the community as the tradition involves volunteer work and requires donations to charity. We set out a few things below that you should understand before donating to any charity.
What is DGR Status?
You might wish to confirm whether the charity you are looking to donate to during Ramadan is a registered charity, whether Deductible Gift Recipient (DGR) status applies to that organisation and if you can receive a tax deduction for your donation. If you are planning on receiving donations during this period, you can also check your religious organisations or charities’ status to see whether the donation made will be tax deductible and also what your reporting requirements might be.
You can also ask the charity directly whether your donation will be tax deductible. It does not necessarily mean that the organisation is not legitimate, it might just mean that it was not eligible for DGR status for tax purposes. It may be particularly important to you if you are planning on making a large donation.
How Do I Know if the Charity is Legitimate?
If you are unsure or uncomfortable with making on the spot donations, you can always ask the person that is collecting the money where it is going and how the money will be used. You can also easily look up charities online to see what their status is. It is very easy to do this and may give you some comfort when donating to charity. You can also search the company name online to ensure that the charity is legitimate. If you have any concerns, it is reasonable to be wary in this process.
If anyone is asking for donations in person and you have any concerns about that you can certainly ask them for information and identification. It is best not to give your bank details to anyone you are unsure about. You should also be equally wary online when giving any personal details out or filling in forms when you are not sure about the charity’s identity.
Where is My Money Going?
If you want more information about what the charity is doing and where the money is going then you can usually look up financial reports for most charities online. See our article on financial reporting obligations if you are running a charity and want more information about this.
Religious Organisation and Tax Benefits
Many religious organisations have DGR status and other tax concessions. You can confirm this by searching online to see whether a particular religious organisation has DGR status or are a registered charity for this purpose.
Whether you are a religious organisation planning on receiving donations or you as an individual or business owner are planning on giving donations during Ramadan, it is a good idea to educate yourself about this process so that you are confident your donations are going to a charitable purpose that you support. If you have any questions about receiving charitable donations or your obligations as a registered charity, check your ongoing obligations with the ACNC.
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