The ATO has commenced revoking the deductible gift recipient (DGR) status of some non-government organisations. This has occurred due to a recent review which found that these organisations do not meet the eligibility requirements for DGR endorsement and have not been approved by the ATO for a 3-year extension.
After the implementation of the DGR reform which extended the charity registration requirement to all DGR categories, an automatic 12-month general transition period applied, giving existing DGRs until 14 December 2022 to become a registered charity and an additional 3-year extension in limited circumstances by application. Both of these have now passed.
Additional DGR categories which require registration as a charity include school building funds, approved research institutes, and fire and emergency services funds. They also include public funds for: hospitals; public ambulance services; religious instruction in government schools; rural school hostel building; persons in necessitous circumstances; register of environment organisations, and register of cultural organisations.
Organisations affected will receive a notice with the date, reason for revocation and information regarding their right of review. Those that believe that they satisfy the eligibility requirements can apply or reapply for endorsement with the Australian Charities and Not-for-profits Commission (ACNC). DGRs that have had their status revoked will not be entitled to receive tax-deductable donations or gifts, will be required to remove tax-deductible status from their website or other materials, and will be required to distribute surplus gifts and donations to an eligible DGR.
To be registered as a charity with the ACNC, an organisation must generally be not-for-profit, have only charitable purposes that are for the public benefit (except for purposes that are incidental or ancillary to charitable purposes), not have a disqualifying purpose, and not be an individual, a political party, or a government entity.
It is important to know that not all charities are eligible for DGR endorsement. There are only a select few charity types that are eligible to be endorsed as a DGR. These consist of: health; education; research; welfare and rights; defence; environment; the family; international affairs; sports and recreation; cultural organisations; fire and emergency services; and ancillary funds.
According to the ACNC, applications for charity registration are usually processed within 15 days of receiving all the required information. It should also be noted that applications are assessed in the order of receipt and cannot be expedited, so applications should be lodged as soon as possible to avoid delays.
The date of registration as charity will be the date the organisation commenced its charitable activities and was eligible for charity registration, which will be the latest of the following dates:
While the ACNC can consider requests to backdate charity registration, the organisation will have to provide evidence that it was eligible from the date that is requested.
