Why DGR reforms were made
The government has announced several reforms to the administration and oversight of organisations with deductible gift recipient (DGR) status.
These changes are designed to:
- strengthen governance arrangements
- reduce administrative complexity
- ensure continued trust and confidence in the not-for-profit sector.
DGRs to be registered as a charity
On 13 September 2021, the Treasury Laws Amendment (2021 Measures No. 2) Act 2021External Link became law.
As a precondition for DGR endorsement, this Act amends the Income Tax Assessment Act 1997 to require a fund, authority or institution to be either:
- a registered charity
- an Australian Government agency
- operated by a registered charity or an Australian Government agency.
Before the amendments, a majority of DGR categories required non-government organisations to be registered as charities. The amendments extended this requirement to 11 general DGR categories. This measure doesn't apply to ancillary funds or DGRs specifically listed in the tax law.
For more information, see:
- Requiring DGRs to register as charitiesExternal Link – Treasury submission exposure draft
- DGRs and the ACNCExternal Link – Australian Charities and Not-for-profits Commission (ACNC) factsheet
- Start a charityExternal Link – what you need to do before you start a charity.
DGR registers reform
On 28 June 2023, the Treasury Laws Amendment (Refining and Improving our Tax System) Act 2023 became law.
This Act amends the Income Tax Assessment Act 1997 to transfer administrative responsibility of 4 unique DGR categories from other government departments to the ATO.
These changes started on 1 January 2024 and repealed provisions that required each of the 4 departments to maintain a separate register.
From 1 January 2024, transitional provisions apply to those organisations that were already DGR endorsed in one of the 4 unique DGR categories before 1 January 2024. These organisations remain endorsed if they continue to meet eligibility criteria.
Transitional provisions also apply to those organisations that had an in-progress application with one of the 4 government departments before 1 January 2024. These applications were transferred to us from 1 January 2024.
For more information, see DGR registers reform transitional provisions.
Before the transition
Before 1 January 2024, the 4 unique DGR categories were administered by other Australian Government departments as follows:
- Register of Cultural Organisations – Department of Infrastructure, Transport, Regional Development, Communications and the Arts
- Register of Environmental Organisations – Department of Climate Change, Energy, the Environment and Water
- Register of Harm Prevention Charities – Department of Social Services
- Overseas Aid Gift Deductibility Scheme – Department of Foreign Affairs and Trade.
After the transition
From 1 January 2024, the ATO started assessing eligibility for DGR endorsement for:
- cultural organisations
- environmental organisations
- harm prevention charities
- developing country relief funds or organisations (previously known as overseas aid funds).
These changes mean we now administer all 52 DGR categories set out in Division 30 of the Income Tax Assessment Act 1997.
For more information on the transition, see:
- Treasury Laws Amendment (Refining and Improving Our Tax System) Act 2023External Link
- Streamlining the Deductible Gift Recipient RegistersExternal Link – the Minister's media release on 29 June 2023
- Deductible Gift Recipient (DGR) Registers ReformExternal Link – outcomes on Treasury consultation held between 19 January and 19 February 2023DGR categories
- DGR registers reform transitional provisions
DGR status for community charities
On 28 June 2024, the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024External Link became law.
This Act amends the Income Tax Assessment Act 1997 and Taxation Administration Act 1953 to establish:
- 2 new general DGR categories for
- community charity trust
- community charity corporations
- a requirement for a Treasury Minister to formulate guidelines for the 2 new DGR categories.
These amendments started on 29 June 2024.
To be eligible for DGR endorsement as a community charity trust or corporation, a trust or company must, among other requirements, be specified in a ministerial declaration in force. Entities seeking to be specified in a ministerial declaration should contact Treasury at dgr@treasury.gov.au.
Guidelines
Treasury opened public consultation on the exposure draft guidelines and accompanying explanatory material on 5 November 2024. The consultation period ended on 3 December 2024. You can refer to the outcomes of Treasury's consultation at Building Community – ministerial guidelines for community foundationsExternal Link.
The finalised guidelines were registered on 24 February 2025 and are accessible on the Federal Register of Legislation websiteExternal Link.
Background
Originally announced by the previous government in the Budget March 2022–23 – Budget Paper No. 2: Budget MeasuresExternal Link, it was proposed that the tax law be amended to specifically list up to 28 community foundations affiliated with the peak body Community Foundations Australia. The specific listing would be time-limited for 5 years, from 1 July 2022 to 30 June 2027.
A refined model was proposed in the Budget 2023–24– Budget Paper No. 2: Budget MeasuresExternal Link which includes:
- the removal of the 5-year time limit requirement
- DGR endorsement by the Commissioner of Taxation under new ministerial guidelines.
More information
For more information, see:
- Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023External Link
- Building Community – deductible gift recipient status for community foundationsExternal Link
- Building Community – ministerial guidelines for community foundationsExternal Link
- Taxation Administration (Community Charity) Guidelines 2025External Link.
Subscribe to our newsletter for updates
Subscribe to our monthly not-for-profit newsletter to keep up-to-date with:
- our new and refreshed guidance
- the progress of the proposed amendments
- how to meet your not-for-profit's tax and super obligations.