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Community charity trusts

Find out which community charity trusts can be endorsed as deductible gift recipients and their key obligations.

Published 4 September 2025

Definition of a community charity trust

From July 2024, a community charity trust may apply to be endorsed as a deductible gift recipient (DGR). These not-for-profit (NFP) entities have broad purposes and can engage in a range of activities across other DGR general categories.

To be endorsed as a DGR, a community charity trust must first satisfy all eligibility criteria. Review the eligibility criteria and governing documents requirements before taking steps to become DGR endorsed. This involves submitting a proposal to the Treasury and registering with the Australian Charities and Not-for-profits Commission (ACNC).

Once DGR endorsed, you can reference a tax-deductible status on the community charity website or in other materials. Donors who gift $2 or more to a DGR endorsed community charity will generally be able to claim an income tax deduction.

Eligibility criteria

A community charity trust will need an active Australian business number (ABN) and must meet all the following eligibility criteria to become DGR endorsed. It must:

  • be specified in a ministerial declaration that is in force
  • be registered as a charity with the ACNC
  • be established and maintained for specified allowed purposes
  • be a trust which only has constitutional corporations as trustees
  • have governing documents which meet certain legal requirements
  • ensure each of its trustees has agreed in the approved form to comply with the rules in the Taxation Administration (Community Charity) Guidelines 2025 and none of its trustees has revoked that agreement.

Find out more about how to meet the eligibility criteria at steps to become a community charity DGR.

Constitutional corporation

Each trustee of the trust must be a constitutional corporation.

A constitutional corporation is defined in the Income Tax Assessment Act 1997 as either:

  • a corporation to which paragraph 51(xx) of the Australian Constitution applies
  • a body corporate that is incorporated in a territory.

A constitutional corporation would usually be registered with the Australian Securities & Investments Commission (ASIC) and have an Australian Company Number (ACN). Less frequently, it may be incorporated under associations' incorporation legislation in a state or territory and have an association or incorporation number.

Governing documents

You must include the following rules in the community charity's governing documents, for it to be eligible for DGR endorsement:

Objects

The rules must clearly set out and reflect the objects of the community charity trust. The objects should be limited to allowed purposes.

Allowed purposes

The community charity trust must be established and maintained for both of the following purposes:

  • providing money, property or benefits to a DGR (other than to ancillary funds or other community charities) for any of their DGR purposes
  • engaging in either
    • the principal activity of a DGR (other than an ancillary fund, a DGR that is specifically listed by name or a community charity)
    • pursuing the principal purpose that is the same as a DGR (other than an ancillary fund, a DGR that is specifically listed by name or a community charity).

In addition, an entity may also have a purpose of establishing one or more DGR entities, other than a community charity or ancillary fund. However, no other purposes are permitted.

Not-for-profit basis

The rules must clearly set-out and reflect that the community charity trust must be a NFP entity that does not operate for the profit or gain of specific people or its individual members. This applies both while it is operating and when it winds up.

The community charity trust must not provide any benefit directly or indirectly to any of the following, unless otherwise permitted by the rules in the Taxation Administration (Community Charity) Guidelines 2025External Link:

  • the trustee
  • a member, director, employee, agent or officer of the trustee
  • its donor and their relatives
  • its founder and their relatives
  • an associate of any of the above (other than an eligible DGR or registered charity).

Winding up, ceasing to be a community charity or revocation

The rules must require that on the community charity trust:

  • winding up or ceasing to be a community charity, all its net assets must be provided to a DGR in accordance with the purposes of the charity
  • ceasing to be a DGR or if its DGR endorsement is revoked, the following assets must be transferred to a DGR in accordance with the purposes of the charity
    • gifts of money or property and deductible contributions made to the trust for its principal purpose
    • money received by the trust because of such gifts or contributions.

Indemnity prohibition

The rules must clearly prohibit the trust from indemnifying the trustee and its employees, officers or agents for a loss attributable to their:

  • dishonesty
  • gross negligence
  • recklessness
  • deliberate act or omission known to them to be a breach of duty.

Receipts

The rules must state receipts will be issued in the name of the community charity trust for every gift it receives. It must include all information required of a DGR and the community charity guidelines. Find out more at issuing receipts.

Steps to become DGR endorsed

Check that your entity has met all eligibility criteria before applying for DGR endorsement.

You will then need to complete 5 steps to be DGR endorsed as a community charity trust:

Step 1 ؘ– Check your entity has an active ABN

Your community charity trust must only have constitutional corporations as trustees. It must also have an active ABN before it can register as a charity and become DGR endorsed.

If you're unsure if the entity has an active ABN, search for it by name at ABN LookupExternal Link to confirm its status.

If the entity does not already have an active ABN, you will need to apply using the Australian Business Register (ABR) website. Go to ABN registration for not-for-profits for help in selecting the correct structure for your community charity trust when completing the ABN application.

Step 2 – Check governing documents meet legal requirements

Check that your entity has governing documents that meet the specific eligibility requirements of a community charity. If your community charity does not have governing documents that meet these requirements, you must create or update them.

Also check that your governing documents also meet relevant state or territory government requirements. You may need to notify them that your community charity has been established, or that you've made updates to its governing documents. Refer to How to make changes to your governing documentsExternal Link.

Step 3 – Submit a proposal for a ministerial declaration

A community charity trust must be specified in a ministerial declaration, that is in force, to become eligible for DGR endorsement.

To achieve this, you will need to submit a written proposal to the Treasury, who are responsible for receiving these requests. Visit the Treasury websiteExternal Link to find out how to submit a proposal to the minister.

If your request is successful, specification in the declaration alone will not automatically grant or guarantee DGR endorsement. You must still meet all other eligibility criteriaExternal Link before you can be endorsed as a DGR.

Step 4 – Apply to be registered as a charity

Your community charity trust must be registered as a charity with the ACNC to be eligible for DGR endorsement. If you are already registered as a charity, go to Step 5.

If you are not already a registered charity, visit the ACNC websiteExternal Link and complete the charity registration self-assessment before applying. It will help you to understand:

  • if your organisation is eligible to register as a charity
  • how to complete your registration application
  • ongoing obligations to the ACNC.

If you proceed to complete an application for charity registration with the ACNCExternal Link, you can apply for ATO endorsement at the same time. The ACNC will send us your DGR application for assessment, once your charity has been registered. You will not need to separately complete Step 5.

When completing your online charity application form, you will need to:

Step 5 – Apply to be DGR endorsed

If you are already a registered charity with the ACNC, you can apply directly to us to be DGR endorsed. Download and complete a paper application and provide item number 13.1.1 Community charity trust as the type of DGR category.

You will need to submit all the following documents:

Post your completed documents to:

Australian Taxation Office
PO Box 3373
PENRITH  NSW  2740

DGR endorsement notification

We will send a written notification to let you know if your entity has been DGR endorsed, or if your application has been refused.

If the application is refused

If your application for endorsement is refused, we will provide you with a clear explanation of our decision. You can request that this decision be reviewed by us. To do this, contact the person handling your case and put the full reasons for seeking a review in writing. We will work with you to resolve the matter quickly and informally.

If endorsement remains refused after informal review, you have the right under the law to ask for a formal review by lodging an objection against the refusal or deemed refusal.

If there are delays in notification

If there is a delay in us notifying you, you can make a written request that your application be treated as though it had been refused. The deemed refusal will trigger formal review rights.

The earliest you can notify us that you want your application to be treated as if it had been refused is the later of the following:

  • 60 days after you made the application
  • 28 days after the last day on which you gave us information or documentation that we requested.

What to do after DGR endorsement

Once DGR endorsed your community charity should:

Use the Australian Business Register

The ABR records that a community charity trust is DGR endorsed.

You should direct potential donors to confirm your DGR endorsement status on ABN LookupExternal Link before they donate.

Issue receipts

Your community charity trust is entitled to receive income tax deductible gifts from the start date of its DGR endorsement. A deduction for gifts made to a DGR is claimed by the person or organisation that makes the gift (the donor).

The guidelines require community charity trusts to issue receipts for all tax-deductible gifts they receive. Receipts must include:

  • community charity trust name and ABN
  • the name of the donor
  • a statement that the receipt is for a gift it has received.

If the community charity trust does not include this information on its receipts when required, its DGR endorsement may be revoked.

Find out about gift types and conditions.

Undertake regular self-reviews

You must notify us if your community charity ceases to be eligible for DGR endorsement. To check if your DGR eligibility has changed, download and complete our Worksheet 1: review of a DGR endorsed as a whole. You should complete this self-review each year, or whenever there is a substantial change in your activities.

If you complete the self-review worksheet and find that your community charity remains eligible for DGR endorsement, you do not have to contact us. Your DGR status will remain unchanged. Keep the completed worksheet with your organisation’s other records, as it shows why and how you arrived at the decision.

If you complete the self-review worksheet and find that your community charity is no longer entitled to DGR endorsement, you must tell us in writing. You need to do this before entitlement ceases or as soon as practicable afterwards.

Trustees and directors of trustees of community charity trusts may be liable for administrative penalties if they represent or mislead that the trust is:

  • eligible to remain DGR endorsed, when it is not eligible
  • DGR endorsed, when it is not.

Keep proper accounts

As a DGR, your community charity must keep adequate accounting and other records that detail and explain all transactions that are relevant to its status as a DGR.

You must maintain these records for at least 5 years after the completion of a transaction or an act that it relates to. The community charity guidelines provide the penalty for not keeping proper accounts is 10 penalty units.

Submit annual returns

You are required to lodge a community charity trust return for each financial year, even if it is exempt from income tax. The new return is under development.

We expect the return, and supporting guidance on how to lodge, will be finalised by late 2025.

To be notified when the return is available subscribeExternal Link to our NFP Newsletter. You can also visit the Not-for-profit newsroom at any time to search for new articles.

Meet your minimum annual distribution requirement

Community Charity Guidelines 2025External Link require that community charity trusts distribute at least 4% of the market value of their net assets each financial year. The market value is taken as at the end of the previous financial year.

Community charity trusts can make distributions by:

  • providing money, property or benefits to a DGR (other than to an ancillary fund or other community charity) for any of their DGR purposes
  • incurring expenditure in the direct course or furtherance of its purpose that is either
    • the principal activity of a DGR (other than an ancillary fund, a DGR that is specifically listed by name or a community charity)
    • pursuing the principal purpose of a DGR (other than an ancillary fund, a DGR that is specifically listed by name or a community charity)
  • incurring expenditure in the direct course or furtherance of its purpose in establishing one or more DGR entities (other than an ancillary fund or a community charity).

You can apply to reduce your minimum annual distribution rate for a financial year. The new return is under development and expect that it will be available in 2026.

The community charity guidelines provide the penalty for not meeting the minimum annual distribution requirements is 30 penalty units (if a shortfall is greater than $1,000).

Newly established community charity trusts

Community charity trusts are not required to make a distribution during the financial year in which they are established or during the next 4 financial years. During this time, trustees should consider the purpose of the community charity trust when deciding on an appropriate annual distribution amount during its early years.

Comply with community charity guideline rules

Failure to comply with the rules in the Community Charity Guidelines 2025External Link means:

  • the trustee and its directors may incur administrative penalties
  • the community charity trust will no longer be eligible to be DGR endorsed.

Trustees and directors of trustees of community charity trusts are generally jointly and severally liable for any administrative penalty associated with the guidelines. These penalties cannot be reimbursed from the trust.

How to revoke an agreement to comply with the guidelines

A trustee may revoke its agreement to comply with the rules in the Community Charity Guidelines 2025External Link by submitting a Community charity trusts – revocation form.

Suspension or removal of trustees

Generally, we can suspend or remove a trustee that breaches the guidelines or any other Australian law.

We will give the trustee a written notice advising them of our decision. It will explain the reasons why the decision was taken and, in the case of suspension, set out the period of suspension.

When a trustee is suspended or removed, we will appoint an acting trustee. They will undertake the duties of trustee until the suspension period has ended or a replacement trustee is appointed. We may give directions to the acting trustee by written notice. Any conduct by an acting trustee that contravenes a notice from us is an offence.

When we appoint an acting trustee, we must make a written order vesting the property of the community charity trust with the acting trustee. Non-compliance with a written order from us, or the acting trustee, is an offence.

You have the right under the law to ask for our decision to be reviewed, by lodging an objection. You must do this in writing and give the full reasons for your objection.

The following decisions are also reviewable by the Administrative Review Tribunal and the Federal Court of Australia:

  • a decision to suspend a trustee
  • a decision to change the time a suspension of a trustee ends
  • a decision to remove a trustee.

NFP support and news

Visit the Not-for-profit newsroom and search for tax, super and registry articles relevant to your NFP. Another great way to stay up to date is to subscribeExternal Link to our NFP Newsletter. It is delivered by email each month.

Using the NFP tax, super and registry responsibilities checklist will also help you track and meet obligations for your NFP. Follow along during the year and check off tasks as you go.

If you have further questions, talk to us by phoning 1300 130 248 between 8:00 am and 6:00 pm, Monday to Friday.

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