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Public funds

This fact sheet explains what a public fund is for the purposes of endorsement as a deductible gift recipient.

Last updated 11 October 2016

Various deductible gift recipient (DGR) categories require organisations to establish a public fund to receive tax deductible gifts and contributions.

What is a public fund?

Public funds for DGR purposes fall under two types:

  • funds established and controlled by government or government authorities
  • funds to which the public is invited to contribute and in fact does contribute.

A public fund may be established as a separate entity, for example under an instrument of trust, or as part of a sponsoring organisation.

There are special requirements applying to some public funds.

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Which DGRs must be public funds?

Various DGR categories require organisations to establish a public fund to receive tax deductible gifts and contributions to be applied for the purposes described in the DGR category.

Examples are:

  • school building funds
  • overseas aid funds
  • necessitous circumstances funds
  • scholarship funds
  • war memorial repair funds
  • fire and emergency services funds.

See also:

What are the requirements of a public fund?


For a fund to fall within one of the 'public fund' DGR categories, its objects must satisfy the requirements of the category. If there is no documentation evidencing your fund's existence, purpose and operations, you may have difficulty in demonstrating that your fund is maintained for a purpose required by the DGR category.

Public contributions

It must be the intention of the promoters or founders that the public will contribute to the fund. Public contributions must be invited, and the public must in fact contribute to the fund. If there are no contributions from the public despite invitations, the fund will not be considered a public fund.

Committee members

For non-government public funds, the fund must be administered or controlled by people or institutions who, because of their tenure of some public office or their position in the community, have a degree of responsibility to the community as a whole. Examples are:

  • Church authorities and clergy
  • school principals
  • judges, solicitors, doctors and other professional people
  • mayors, councillors, town clerks and members of parliament
  • recipients of awards from government for services to the community such as an Order of Australia
  • members of a professional body which has a professional code of ethics and rules of conduct.

A public fund must be controlled by a committee made up of a majority of "responsible people" and must be set up so that it is not possible for public control to lapse. We refer to this as the responsible person requirement. The daily operations however may be delegated to other persons.

Organisations such as Rotary, Lions and Apex Clubs often sponsor public funds. If an organisation does not have a public character due to, for example, selective membership, the committee controlling the fund may have a public character if it is controlled by people who meet the responsible person requirement.

Operate on a non-profit basis

The fund must operate on a non-profit basis. This means that money must not be distributed to members of the managing committee or trustees of the fund except as reimbursement for out-of-pocket expenses incurred on behalf of the fund or as proper remuneration for administrative services.

Gifts and deductible contributions

Gifts and deductible contributions made to the fund must be kept separate from any other funds of the sponsoring organisation (if there is one). A separate bank account and clear accounting procedures are required for a public fund.


Including a rule covering receipts in your fund's governing rules is part of providing a framework to ensure that property and money donated to the fund is used for the purpose it was donated.

The tax law also requires that if an endorsed DGR issues receipts for tax deductible gifts or contributions, particular information must be provided on the receipts.

Dissolution clause on winding-up

The fund must have an acceptable dissolution clause: that is, one which provides that on winding-up, any surplus money or other assets must be transferred to some other DGR.

The following is an acceptable dissolution clause for a public fund:

Dissolution clause

In the event of the fund being wound up or dissolved, any surplus assets remaining after the payment of the fund's liabilities shall be transferred to another fund, authority or institution, which has similar objects, and to which income tax deductible gifts can be made.

To be endorsed as a DGR, an organisation must also have acceptable rules dealing with the transfer of surplus gifts and deductible contributions on winding up or revocation of endorsement.

You must notify us in writing of any changes to the funds constitution or other founding documents.

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Can a public fund be a gift fund?

Organisations that are endorsed or seeking to be endorsed as a DGR for the operation of a fund, authority or institution must maintain a gift fund. An exception is where the organisation as a whole is already endorsed as a DGR.

A public fund may itself satisfy the gift fund requirement if it only receives gifts or deductible contributions and has appropriate winding up rules. If it receives other money or property, it will need to maintain a gift fund.

Things to remember:

  • If your organisation is endorsed for the operation of several public funds, then money or property belonging to one public fund must not be used to support the purposes of another fund.
  • A single gift fund can be maintained for two or more of your public funds.
  • Records must be kept evidencing the receipt and use of money and property belonging to each public fund.


Consider the following questions, together with the other information we have provided, when working out whether your organisation is a public fund.

  • Is your organisation a fund and not an institution?
  • Do the objects clearly set out the purpose of the fund?
  • Do the rules clearly set out that the public will be invited to contribute to the fund?
  • Does the public or a significant part of it, in fact, contribute to the fund?
  • Is the fund set up such that it continues to be controlled by a majority of people who meet the responsible persons requirement?
  • Is the fund operated on a non-profit basis, with suitable non-profit and dissolution clauses in its constituent or governing documents?

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