There are two main types of not-for-profit (NFP) organisations:
- other NFP organisations.
Some of these organisations are also deductible gift recipients.
If you’re not sure if your organisation is NFP or what type it is, phone the ATO on 1300 130 248.
Many organisations work to help the community but only some of these organisations are charities. The word charity has a special legal meaning.
Your organisation may be a charity if it does not operate for profit and has the following characteristics:
- works for people who are affected by poverty or sickness or who are elderly
- promotes education or religion
- works to benefit the community in another way.
Examples of charities include some religious groups, aged care homes, disability service organisations, animal welfare societies, arts or cultural groups and environmental protection groups.
- public benevolent institutions (PBIs)
- health promotion charities (HPCs)
- other charities.
Examples of other NFP organisations:
- sporting and recreational clubs
- community service organisations
- professional and business associations
- cultural and social societies.
NFP organisations that are not charities are able to self-assess their eligibility for exemption from income tax, but will need to register for other tax concessions.
Some Indigenous corporations can structure as a NFP organisation. These organisations deliver important services to the community.
As an Indigenous NFP you may be able to access tax concessions which means you:
- may not have to pay income tax
- may receive tax-deductible donations.
- Important tax matters for Indigenous corporations
- Office of the Registrar of Indigenous CorporationsExternal Link
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. Gifts are also referred to as donations.
To be entitled to receive tax-deductible donations, an organisation (including a charity) must be a DGR.
Extending DGR status to entities promoting Indigenous languages
From 1 July 2019, DGR status eligibility has been extended to organisations that have a principal purpose of promoting Indigenous languages.
To be eligible to receive tax-deductible donations Indigenous language organisations will need to be listed on the Register of Cultural Organisations (RoCO) which is administered by the Department of Communications and the Arts. Once listed on the register, we will provide DGR endorsement.
See also:The ATO describes not-for-profit (NFP) organisations as those that do not operate for the profit or gain of their members, including charities and deductible gift recipients.