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  • Support for not-for-profits

    In addition to the information on this page, see Support for businesses and employers for information relevant to not-for-profits, including:

    On this page:

    COVID-19 and mutuality

    While you are impacted by COVID-19, the receipt of JobKeeper payments and changes in trading may require you to temporarily adjust how you:

    • apportion salary and wage expenses
    • calculate your non-member percentage.

    JobKeeper payments

    As a result of COVID-19, many taxable not-for-profit (NFP) organisations (for example, clubs, societies and associations) applying the mutuality principle to revenue from members have experienced:

    • a rapid decline in revenue from members
    • an increase in assessable income through receiving JobKeeper payment that has helped them to pay the salary and wages of employees.

    If you're a taxable NFP and have experienced an increase in assessable income through receiving JobKeeper, you will need to separate your apportionable expenses (such as employees’ salary and wages) into member and non-member amounts when calculating your taxable income.

    While receiving JobKeeper payments for employees, you can adopt an apportionment method that determines the deductible component of salary and wages by:

    • including an amount equal to the JobKeeper payments received for each of your eligible employees
    • applying your usual non-member percentage to the amount of any remaining salary and wages in excess of the JobKeeper payments.

    Non-member percentage

    If you use surveys to determine your visitor and member attendance, for calculating your non-member percentage using the Waratah formula, we recommend that you conduct a minimum of two one-week surveys each year. You should conduct surveys during periods that are likely to be representative of average trading periods.

    However, if you have not conducted your surveys during those periods due to closures or other limitations resulting from COVID-19, you may choose another basis. Your chosen basis should reasonably and accurately reflect your visitor and member attendance in the relevant income year. It could include:

    • using one survey from the relevant income year for one of those periods, and one survey from the previous income year. The survey from the previous income year will cover the period that no survey was conducted in the relevant income year due to COVID-19 related closures or other limitations
    • using two surveys from the previous year if no survey was conducted during those periods in the relevant income year due to closures or other limitations.

    You should keep accurate records that:

    • reflect how you calculated your revenue and expenses
    • support your decision in choosing the basis for your non-member percentage
    • reflect how you determined the deductible component of your expense items.

    Find out about:

    JobKeeper changes for child care providers

    From 20 July 2020, eligibility for JobKeeper stopped for approved child care providers. You cannot claim JobKeeper payments for a business participant or your employees whose ordinary duties relate principally to the operation of the child care service.

    If you provide other services in addition to child care services, such as kindergartens, some of your employees may still be eligible. If an employee has mixed duties, they will only remain eligible if their ordinary duties in a fortnight do not principally relate to the operation of the approved child care service.

    Next steps:

    Find out about:

    Donating refunded membership fees

    Given the physical distancing restrictions in place as a result of COVID-19, many not-for-profit organisations such as sporting clubs and cultural organisations are providing their members with full or partial refunds for 2020 membership fees. Some organisations are also providing an option to donate the refundable fees.

    If the organisation provides this option, they must offer their members a clear choice of either:

    • receiving a refund
    • donating all or part of their refund, either to
      • their organisation
      • another organisation.
       

    Members who choose to donate their refunds can only claim a tax deduction if they donate to a deductible gift recipient (DGR). To be tax deductible they must not have received or retained any member benefits in return for their gift or donation. Member benefits include any form of preferred member status in current or future years, including on season resumption.

    Members can express a preference to the DGR on how they would like their donation to be used. However, the DGR maintains the right to determine how they use and distribute the funds. Members should keep records of their donation to help them prepare their tax return.

    A sporting club does not qualify as a DGR, so a donor cannot receive a tax deduction for a gift or donation made directly to a sporting club. However, the club may invite its members to donate to the Australian Sports Foundation (ASF) which is a DGR.

    A donor can nominate an ASF registered organisation or project as a preferred beneficiary and receive a tax deduction for their donation or gift. However, the ASF is not required to allocate that donation to the nominated organisation or project.

    Example 1 – no deduction for donating partially refunded membership fee to non-DGR

    In January 2020, Ruby purchases a $100 annual membership for her football club. Her membership includes a season pass to attend home games as well as discounted food and drink at club bars and restaurants. Due to the physical distancing restrictions put in place as a result of the COVID-19 pandemic, the 2020 season is cancelled after round two and club venues are closed.

    The football club offers members a refund of $85. This takes into account that some membership benefits were used in the short season. Ruby chooses to donate her $85 refund back to her club to support them. She is unable to claim a tax deduction for this donation as her football club is not endorsed as a deductible gift recipient (DGR).

    End of example

     

    Example 2 – claiming partially refunded memberships as donations

    Gary donates his partially refunded membership to the Australian Sports Foundation (ASF), which is a deductible gift recipient (DGR), via his football club. The ASF gives Gary a receipt for the amount of his donation. He can claim this as an $85 tax deduction. Gary can nominate an ASF project that supports his football club as a preferred beneficiary. However, the ASF has absolute discretion as to how they allocate the donation, and they may choose to allocate it to a different ASF project.

    End of example

    Find out about:

    JobKeeper for religious institutions

    If you are a religious institution, you can qualify for JobKeeper if you pay a minister of religion or a full-time member of a religious order who is not an employee to perform religious activities.

    Find out about:

    Charities – excluding government grants from JobKeeper turnover

    Charities (other than universities or schools) that are registered with the Australian Charities and Not-for-profits Commission (ACNC) can elect to exclude government grants from their JobKeeper turnover test.

    Government grants include consideration for supplies you make, received from:

    • an Australian government agency
    • a local government body
    • the United Nations or its agency.

    Next step:

    See also:

    Amended guidelines for ancillary funds

    The guidelines for private and public ancillary funds have been amended to encourage increased distributions to deductible gift recipients (DGRs) as a result of COVID-19.

    Private and public ancillary funds that exceed their minimum distribution rate for 2019–20 and 2020–21, by a total of five percentage points or more, will have a lower minimum distribution rate in future years.

    To find out if you are eligible, see:

    See also:

    Australian disaster relief funds

    The COVID-19 pandemic was declared a disaster from 18 March 2020 for the purpose of tax-deductible donations to COVID-19 relief funds. Certain Australian disaster relief funds are able to receive tax-deductible donations from 18 March 2020.

    In order to receive tax-deductible donations, Australian disaster relief funds will need to:

    • be established for the relief of people affected by COVID-19
    • apply to the ATO for DGR endorsement as a disaster relief fund for the purpose of COVID-19
    • be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC).

    Donations will be tax-deductible when made within two years from 18 March 2020 (when the pandemic was announced).

    A separate disaster relief fund is required when a new disaster is declared. Funds established for bushfire relief purposes cannot be used for COVID-19 related relief.

    Find out about:

    JobKeeper turnover test for universities

    The JobKeeper turnover test for universities is met if your projected GST turnover for the test period falls short of your current GST turnover for the relevant comparison period by a specified percentage (either 30% or 50%).

    This test applies to Table A and Table B providers within the meaning of the Higher Education Support Act 2003.

    To apply the test there are five steps you need to follow:

    1. identify the turnover test period
    2. identify the relevant comparison period
    3. work out the relevant GST turnover
    4. determine which shortfall percentage applies
    5. determine if GST turnover has fallen by the specified shortfall percentage.

    Find out about:

    See also:

    Last modified: 28 Sep 2020QC 62682