When people donate to your organisation they may seek a tax deduction.
To receive such a deduction, certain requirements must be met.
The most important things for you to do to ensure your donors can claim tax deductions are:
- ensure your organisation is a DGR
- understand gift and contribution conditions
- provide receipts with specific information.
A donor will follow different rules for claiming a tax deduction depending on whether their donation is a gift or a contribution, so it's also important you understand the difference between a gift and a contribution:
- A donor does not receive material benefit in return for their gift (for example, a donor puts $5 in a collection box)
- A donor does receive a material benefit in return for their contribution (for example, a donor purchases a ticket to a fundraising dinner).
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See also:To be eligible to receive tax-deductible gifts, your organisation must be a deductible gift recipient (DGR).