Non-Profit News Service No. 0271 - Donations to help earthquake victims in Chile

On 27 February 2010, a major earthquake struck Chile, causing widespread casualties and damage.

Appeals have been launched to help victims of the disaster by collecting donations to support relief operations.

If your organisation wants to set up a tax-deductible fund to collect donations for use outside Australia, it may be easier and quicker for you to arrange with one of the larger and already approved funds to collect money on their behalf. If your organisation collects donations on behalf of another organisation, remember to comply with state and territory government collections acts.

Donations to an appeal are tax deductible if the organisation operating the appeal is endorsed as a deductible gift recipient (DGR) and is an overseas aid fund. You can check whether an organisation is a DGR on the Australian Business Register. Information about non-government organisations that operate tax-deductible overseas aid funds is also available on the AusAID website.

Your organisation may arrange with an approved overseas aid fund to hold a fundraising event on their behalf by making input taxed sales. Goods and services tax (GST) is not included in the price of input taxed sales and the approved overseas aid fund cannot claim any GST credits for things purchased in making those sales.

For GST purposes, a fundraising event is an event:

• such as a fete, ball, gala show, dinner, performance or similar event
• where goods other than alcoholic beverages or tobacco products are sold - provided that each sale is for $20 or less
• that has been approved by the Australian Taxation Office as a fundraising event.

	For more information about: making tax-deductible donations, collecting on behalf of a DGR and related issues, refer to Assisting victims of disasters fundraising events, refer to the Fundraising guide for non-profit organisations.
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