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.
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.
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