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  • Meeting the 'In Australia' condition

    All DGRs must meet the ‘in Australia’ condition.

    The ‘in Australia’ condition requires all DGRs to be in Australia. This means that all DGRs must be established and operated in Australia.

    The purposes and beneficiaries of a DGR do not have to be in Australia, unless the DGR is one of the following public funds:

    • a public fund for providing religious instruction in government schools
    • a Roman Catholic public fund for religious instruction in government schools
    • a public fund for ethics education in government schools
    • an Australian disaster relief fund
    • a necessitous circumstances fund
    • an Australian war memorial fund
    • a public fund for family counselling or family dispute resolution
    • a marriage guidance fund
    • a public fund for providing money for scholarships.

    Example 1: In Australia condition met – public benevolent institution

    An institution is set up in Australia as a charity whose main purpose is for the relief of poverty. The institution is a registered public benevolent institution.

    The institution’s controlling board, its donors, and most of its assets are in Australia.

    Less than half of the money provided by the institution is sent to beneficiaries overseas. The remainder of the money is given to beneficiaries in Australia.

    The institution is established and operated in Australia. It meets the ‘in Australia’ condition.

    End of example

    Example 2: In Australia condition met – public benevolent institution

    Assume the same facts as Example 1 above, except that all of the money provided by the institution is sent to beneficiaries overseas.

    The institution is established and operated in Australia. The institution is not required to have its purposes and beneficiaries in Australia. It meets the ‘in Australia’ condition.

    End of example

    Example 3: In Australia condition not met

    A public fund is set up in an overseas country. Its controlling board, its donors, and most of its assets are in the overseas country. The fund sends money to Australia to help people who are in necessitous circumstances.

    Although the public fund’s purposes and beneficiaries are in Australia, the fund is not established and operated in Australia. It does not meet the ‘in Australia’ condition. It cannot be endorsed as a DGR.

    End of example

    Example 4: In Australia condition met – overseas aid fund

    A public fund is set up in Australia as a registered charity. It has been declared by the Minister for Foreign Affairs as an ‘approved organisation’. The public fund was established solely for the relief of people in distress in a country declared by the Minister for Foreign affairs to be a developing country.

    The public fund has been admitted to the Overseas Aid Gift Deduction Scheme (OAGDS). The Treasurer has declared, by notice in the Gazette, that the public fund is a ‘developing country relief fund’.

    All of the money provided by the fund is sent to beneficiaries in a country declared to be a developing country.

    The fund is established and operated in Australia. The fund is not required to have its purposes and beneficiaries in Australia. It meets the ‘in Australia’ condition.

    End of example

    Endorsement as a whole

    The organisation must be required to transfer the following surplus assets to a gift deductible fund, authority or institution when it is wound up or its endorsement is revoked (whichever occurs first):

    • gifts and deductible contributions made to the organisation for its principal purpose
    • money received by the entity because of such gifts and contributions.

    For DGRs that are registered charities, the transfer must be to another DGR, with similar objects, which is charitable at law.

    This requirement may be set out in a law, in an organisation's constituent documents or in separate rules governing an organisation's activities.

    Example 1: Sample clause 1 – DGRs not registered with the ACNC

    If the organisation is wound up or its endorsement as a deductible gift recipient is revoked (whichever occurs first), any surplus of the following assets shall be transferred to another organisation to which income tax deductible gifts can be made:

    • gifts of money or property for the principal purpose of the organisation
    • contributions made in relation to an eligible fundraising event held for the principal purpose of the organisation
    • money received by the organisation because of such gifts and contributions.
    End of example

    Example 2: Sample clause 2 – DGRs registered with the ACNC

    If the organisation is wound up or its endorsement as a deductible gift recipient is revoked (whichever occurs first), any surplus of the following assets shall be transferred to another organisation with similar objects, which is charitable at law, to which income tax deductible gifts can be made:

    • gifts of money or property for the principal purpose of the organisation
    • contributions made in relation to an eligible fundraising event held for the principal purpose of the organisation
    • money received by the organisation because of such gifts and contributions.
    End of example

    The winding up requirement for surplus gifts and contributions will also be met where the organisation's winding up clause requires all surplus assets to be transferred to another DGR. In this case, the DGR must have a separate rule regarding distribution of surplus gifts and deductible contributions in the event of revocation of DGR endorsement.

    While DGRs endorsed as a whole are not required to maintain a gift fund, all gifts and deductible contributions made for the principal purpose must be used for that purpose. All DGRs must maintain records that explain all transactions and other acts relevant to status as a DGR.

    See also:

      Last modified: 17 Dec 2018QC 52594