• Types of not-for-profit organisations

    Depending on the type of not-for-profit (NFP) organisation, different concessions are available. NFP organisations fall within two broad categories for tax purposes:

    • charities
    • other types of NFP organisations.

    Some of these organisations are also deductible gift recipients.

    Charities

    Charities receive the highest level of tax concessions. Charities must be registered with the Australian Charities and Not-for-profits Commission (ACNC) before they can be endorsed by us to access charity tax concessions. Charity tax concessions are income tax exemption, FBT exemption, FBT rebate and GST charity concessions. Charities that are endorsed to access any of these concessions are known as 'tax concession charities' or TCCs.

    Charities can be further broken down into the following types:

    • public benevolent institutions (PBIs)
    • health promotion charities (HPCs)
    • other charities.

    PBIs and HPCs receive wider tax concessions than other charities.

    See also:

    Charity types and concessions

    Other types of NFP organisations

    NFP organisations that are not charities can self-assess their entitlement to certain tax concessions, such as income tax exemption.

    Examples of these types of organisations are sporting and recreational clubs, community service organisations, professional and business associations, and cultural and social societies.

    Self-assessment means an organisation can work out for itself whether it is entitled to access a tax concession, and it does not need to be endorsed by us to access the concession.

    See also:

    Is your organisation not-for-profit?

    Types of income tax exempt organisations

    Deductible gift recipients

    Some charities, clubs, societies and associations are also deductible gift recipients (DGRs).

    DGRs are organisations that are entitled to receive tax-deductible gifts. DGRs are either:

    • endorsed by us
    • listed by name in the tax law.

    Tax deductions for gifts are claimed by the person or organisation that makes the gift (the donor). Gifts are also referred to as donations.

    There is a misconception held by some people that all charities can receive tax-deductible donations. This is incorrect – not all charities are DGRs, and not all DGRs are charities.

    To be entitled to receive tax-deductible donations, an organisation (including a charity) must be a DGR. Organisations can apply to us for endorsement if they fall in a general DGR category specified in the tax law. This is done through the DGR endorsement process which is different to the TCC endorsement process where charities apply for approval to access charity tax concessions.

    See also:

    Types of DGRs

    Diagram – organisation types and concessions

    The following table shows the types of NFP organisations discussed above and some of tax concessions they can access, including DGR status.

    Type of NFP organisation Concessions they can access
    Public benevolent institutions (PBIs) and Health promotion charities (HPCs)
    • Income tax exemption
    • FBT exemption - capped
    • GST concessions for charities
    • GST concessions for NFP organisations
    • DGR status
     
    Other charities
    • Income tax exemption
    • FBT exemption - capped (certain types)
    • GST concessions for charities
    • GST concessions for NFP organisations
    • DGR status (certain types)
     
    Other NFP organisations
    • Income tax exemption (certain types)
    • FBT exemption - capped (certain types)
    • GST concessions for NFP organisations
    • DGR status (certain types)
     

    Notes:

    • Not all concessions are shown.
    • Some concessions require endorsement by the ATO.


    See also:

    Tax concessions – an overview

    Last modified: 06 Jul 2016QC 33603