Gifts and donations

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When a gift or donation is deductible

To claim a deduction for a gift or donation you've made, it must:

• be made to an organisation that has deductible gift recipient (DGR) status
• truly be a gift or donation – meaning, you voluntarily transfer money or property without receiving, or expecting to receive any material benefit or advantage in return
• be money or property, including financial assets, such as shares
• comply with any relevant gift conditions – for some DGRs, the income tax law adds conditions affecting the types of deductible gifts they can receive.

To claim a deduction, you must have a record of your donation such as a receipt.

If you receive a material benefit in return for your gift or donation to a DGR – for example, you purchase a ticket to a fundraising dinner – it's considered a contribution and extra conditions apply.

Check it's a deductible gift recipient

A DGR is an organisation or fund that is endorsed by us or listed by name in the tax law to receive tax deductible gifts or donations.

You can only claim a deduction for gifts or donations made to an organisation with DGR status.

Check the DGR status of an organisation before claiming a deduction. You can do this at ABN Look-up: Deductible gift recipientsExternal Link.

If the organisation shows:

• not entitled – you can’t claim a tax deduction
• a status of endorsed or listed – you can claim a tax deduction.

Not all charities are DGRs. For example, crowdfunding campaigns are a popular way to raise money for charitable causes. However, many of these crowdfunding websites are not run by DGRs. Donations to these campaigns and platforms aren't deductible.

Gifts and donations you can claim

To be deductible, your gift or donation must be a certain type of gift and the amount you can claim as a deduction to a DGR registered organisation depends on the type of gift you make.

The types of gifts you can make are:

• gifts of money – you can claim the amount of the gift, but it must be $2 or more
• gifts of property or shares – there are different rules depending on the type and value of the property – see Gift types, requirements and valuation rules
• gifts under the Heritage and Cultural programs – there are special circumstances where donations can also be deductible, see
  • Donating under the Cultural Gifts Program
  • Heritage gifts
  • Conservation covenant tax concessions.

If you receive a token item for your donation you can still claim a deduction. Token items are things of no material value that are used to promote the DGR, such as lapel pins, wristbands and stickers.

You claim the deduction for your gift in the income year you give it. In some circumstances you may elect to spread the tax deduction over a period of up to 5 income years.

DGRs sometimes authorise a business (third party) to collect donations on their behalf. For example, a supermarket may be authorised to accept a donation at the register that they then send onto the DGR. You can claim a deduction for a gift or donation you make in this way, if:

• it meets the conditions above
• you have a receipt from the third party.

Bucket donations

If you made one or more small cash donations, each of $2 or more, to bucket collections – for example, to collections conducted by a DGR for natural disaster victims – you can claim a total tax deduction of up to $10 for those donations for the income year without a receipt.

To claim donations of more than $10, you need a receipt.

Political party and independent candidate donations

In some circumstances, you can claim a deduction for gifts and donations of $2 or more to registered political parties or independent candidates.

This includes paying a membership subscription to a registered political party.

You must have made the gift or donation as an individual (not in the course of carrying on a business) and it can't be a testamentary donation (a donation made in a will).

If the gift is property, the property must have been purchased within 12 months of making the donation.

The most you can claim in an income year is:

• $1,500 for contributions and gifts to political parties
• $1,500 for contributions and gifts to independent candidates and members.

To claim a deduction, you must have a written record of your donation.

For more information, see Claiming political contributions and gifts.

Spreading certain deductible gifts and donations over time

Deductions claimed for gifts and donations can't add to or create a tax loss. The deduction can reduce your assessable income to nil in the income year the gift or donation is made, but any excess can't be claimed in that year. 

Before lodging your tax return, you can choose to spread the deduction over a period of up to 5 income years. You may choose to do this if you:

• aren't able to claim the whole amount in the current income year
• earn a greater amount of income in some income years than others.

You can choose to spread the deduction over a period of up to 5 income years if the gift was one of the following:

• money
• property we value at more than $5,000
• property under the Cultural Gifts Program
• a heritage gift.

For gifts of money or property valued by us at more than $5,000, you can use the Election to spread gift deduction form. The election must be made before lodging the tax return for the year the gift was made.

Gifts and donations you can't claim

You can't claim a deduction for gifts or donations made to any person or organisation without a current DGR status of endorsed or listed, or where the donation provides you with a personal benefit such as:

• social media or crowdfunding platforms
• religious organisations
• raffle or art union tickets – for example, an RSL Art Union prize home
• items that have an advertised price, such as chocolates, mugs, keyrings, hats or toys
• the cost of attending fundraising dinners – you may be eligible to claim a deduction as a contribution if the cost of the event was more than the minor benefit applied as part of the event
• club membership fees
• payments to school building funds made in return for a benefit or advantage – for example, as an alternative to an increase in school fees or placement on a waiting list
• payments where you have an understanding with the recipient that the payments will be used to provide a benefit to you
• gifts to family and friends, regardless of the reason
• donations made under a salary sacrifice arrangement
• donations made under a will.

 

Point of sales donations

Some businesses collect donations on behalf of other organisations when you pay for goods or services. For example, rounding up your total at a supermarket. If you do this, you should:

• know the name of the organisation funds are being collected for
• check the DGR status of the organisation before claiming the amount
• keep your receipt.

Workplace giving

If you give through a workplace giving program, your evidence can be from either:

• your income statement or payment summary
• a receipt from a third party or a written record from your employer.

For more information, see Keeping a record of your donation.

Pledges

If you make a pledge in writing, such as on a contribution envelope or a pledge form, to a fundraising body specifying the name of the DGR and the amount or percentage of the donation to apply to the DGR. You can claim a deduction for the amount of the actual gift you donated to the DGR.

The terms of an appeal may state the portion to apply to the DGR. You can claim a deduction for that portion of the gift.

Keeping records of gifts and donations

Keep records for all tax-deductible gifts and contributions you make, including:

• receipts for donations or contributions
• a signed letter from the eligible organisation confirming the amount of your donation or contribution.

If you receive a minor benefit (for example, a charity dinner) as a benefit for your contribution, the value of the benefit needs to be shown.

Most DGRs will issue you with a receipt for your donation, but not all DGRs are required to. If you don't have a receipt, you can still claim a deduction using other records, such as bank statements.

If a DGR does issue a receipt for a deductible gift, the receipt must state:

• the name of the fund, authority or institution the donation was made to
• the DGR's Australian business number (ABN) (some DGRs listed by name in tax law may not have an ABN)
• that it's for a gift.

Use the ATO app

You can use the myDeductions record-keeping tool in the ATO app to keep track of your expenses and receipts throughout the year. If you have an electronic copy of your receipts that are a true and clear reproduction of the original, you're not required to keep the original paper copy.