The Albanese Government is making it easier for Australians to support causes close to their hearts by reforming the tax deductibility of donations and how philanthropic funds operate.
Under the changes, the government will remove the requirement that a gift must be at least $2 before a donor can claim a tax deduction.
This will support greater participation in philanthropy, by encouraging small donations including rounding up purchases at the point of sale in store and online.
The government acknowledges the important role of ancillary funds in the charity sector in connecting donors with charities that can receive tax deductible donations. To reflect their role in facilitating giving, ancillary funds will be renamed to 'giving funds'.
To help giving funds better fulfil their philanthropic purpose in supporting the charity sector, the government will consult on an increase to their annual distribution rate.
The government recognises that prudent investment of assets held in giving funds increases the amount available for distribution to charities in the longer term. This will be balanced with the need to ensure the gifts, that donors receive a tax benefit for, flow to charities sooner.
The government will also allow giving funds to smooth their annual distributions over three years to provide greater flexibility to fund capital works or large projects for charities.
These reforms to strengthen philanthropy in Australia were recommended by the Productivity Commission in its Future foundations for giving final report and the Blueprint Expert Reference Group in its Not‑for‑profit Sector Development Blueprint.
These are our first steps in responding to the Productivity Commission's work, and builds on the significant work we've already done to double giving, and boost the capacity and capability of Australian community organisations.
Since coming into government, the Australian Government has made positive changes to support Australia's charities and not for profits. We have:
- Improved the deductible gift recipient system by creating a new pathway for community foundations to access tax deductible status.
- Streamlined the deductible gift recipient application process for environmental organisations, harm prevention charities, cultural organisations, and overseas aid organisations.
- Introduced legislation to give the Australian Charities and Not‑for‑profits Commission greater discretion to comment publicly on harmful breaches of compliance, to better support public trust and confidence in the regulatory framework.
- Appointed a widely respected charity sector expert, Sue Woodward, to head the Australian Charities and Not‑for‑profits Commission.
- Refreshed the Australian Charities and Not‑for‑profits Commission Advisory Board to be more representative of the charity sector, bringing First Nations, CALD and youth voices onto the Board.
- Sent a clear signal that charitable advocacy is supported and welcomed by this government.
- Worked with state and territory governments to streamline and harmonise fundraising rules across jurisdictions.
- Funded a new General Social Survey with new questions on participation in volunteering and involvement in cultural events and cultural activities, and providing insights reflecting the impact of giving, participation, and purpose driven activity.
A smarter and stronger charity sector will support vulnerable Australians and build better connected communities.
