Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
The tax law was recently amended to change the gift fund requirements for deductible gift recipients (DGRs). The changes took effect from 12 April 2007 and vary depending on the type of DGR endorsement.
Organisation endorsed as a whole
These organisations are no longer required to maintain a gift fund. However, they may choose to maintain a gift fund if they wish.
Example
A public benevolent institution is endorsed as a DGR as a whole. It operates a hostel and a detox centre. All the money or property handled by the organisation is used to further DGR purposes. It is not required to maintain a gift fund. However, the organisation may choose to maintain a gift fund.
Organisation endorsed for a fund, authority or institution it owns or includes
The requirement to maintain a gift fund remains for these organisations. However, where an organisation operates more than one fund, authority or institution, the organisation can now choose to maintain multiple gift funds or a single gift fund.
Example
A school is seeking endorsement for a school building fund, a scholarship fund and a public library that it operates. The school can choose to maintain:
- separate gift funds for the school building fund, the scholarship fund and the library, or
- a single gift fund in respect of two of them and one separate gift fund for the other, or
- a single gift fund in respect of all three.
Prior to the changes, all endorsed DGRs were required to maintain a gift fund. Organisations that were endorsed as DGRs for the operation of more than one fund, authority or institution were required to maintain a separate gift fund for each fund, authority or institution they operate.
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The amendments modifying the gift fund requirements do not override existing requirements for public funds. If an organisation is required to have a public fund, the organisation must maintain the fund to gain endorsement as a DGR and a gift or contribution may only be used for the principal purpose for which an organisation was granted DGR status.
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What to do/read next
For more information on the new gift fund requirements, see our fact sheet Gift fund requirements for deductible gift recipients (NAT 3194) which we have recently updated.
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Last Modified: Friday, 7 September 2007