Fundraising events such as dinners, balls or auctions can be a powerful way to raise funds. But when your donors get something in return, it can affect whether their payment is tax-deductible.
Donations of money or property to a deductible gift recipient (DGR) are only a tax-deductible gift if the donor receives no material benefit in return. If a donor receives something of value (a benefit), such as a ticket to a fundraising dinner, entertainment, or goods purchased at an auction, the payment becomes a contribution, not a gift.
The good news is that some contributions can still be partly tax-deductible when specific conditions are met - read on to learn more.
When contributions can be deductible
A contribution may be partly tax-deductible if it:
- is made by an individual
- is made to a DGR
- relates to an eligible fundraising event (such as a dinner, ball, fete or auction held in Australia).
It must also meet these thresholds:
- the contribution is more than $150
- the GST-inclusive value of what the donor receives is under whichever amount is the lesser of:
- 20% of the value of the contribution
- $150.
These conditions are called the minor benefit rules.
Understanding the minor benefit rules
The minor benefit is the value of what the donor receives in return for their contribution, for example a meal, entertainment or goods.
As a DGR, you are responsible for working out the value of this benefit. You can base it on:
- comparable market prices
- a cost-based approach if no comparable value is available.
If the conditions are met, your donor can claim a tax deduction for the value of their contribution minus the value of the minor benefit.
Getting this valuation right is essential, as it determines if your donors can claim a deduction and how much they can claim. For more detailed information go to Valuing the minor benefit.
Let's look at a few examples to see how the minor benefit rules work in practice.
Fundraising dinner: deductible contribution with a minor benefit
Mel pays $420 for a ticket to attend a fundraising dinner for Homeward Bound Dogs, a DGR organisation. Homeward Bound Dogs has worked out that the value of the dinner she receives is $80 (GST-inclusive).
- 20% of the $420 contribution is $84, so the $80 value is less than that amount.
- The $80 value is also less than $150.
Because these conditions are met, Mel can claim a partial tax deduction. When she picks up her ticket, Homeward Bound Dogs lets her know the value of the dinner so she can work out her claim. Mel calculates her deduction by subtracting the value of the benefit from the amount she paid: $420 − $80 = $340. This means $340 is deductible.
End of example
Gala event: benefit exceeds threshold, minor benefit rules don’t apply
Bernie pays $400 to attend a gala performance organised by Kavya for the Sunnyside School Building Fund, who are endorsed as a DGR. The normal GST-inclusive market price of a ticket is $100.
- The benefit is less than $150.
- However, when Kavya calculated the 20% threshold, she worked out that 20% of $400 = $80, and so the $100 ticket is over the 20% threshold.
The minor benefit rules are not met and Kavya let Bernie know that no portion of his contribution is tax-deductible.
End of exampleAuctions and event tickets
The minor benefit rules can also apply to fundraising auctions. Donors may claim deductions for their successful bids if the thresholds are met. There is no limit on the number of deductions for auction purchases.
Note that individuals can only claim up to 2 contributions per event for their attendance at the event (for example, 2 tickets, one for themselves and one for a partner).
Auction purchase - deductible contribution with minor benefit rules
Liam attends a charity auction run by his local men's shed and makes a successful bid of $500 for a 1-day ticket to the MotoGP. The GST-inclusive market value of the ticket is $90.
The minor benefit rules are met. The benefit is $90:
- $90 doesn't exceed 20% of the contribution (as 20% of $500 is $100)
- $90 doesn't exceed $150.
After the auction Liam collects his ticket from Sally, the fundraising coordinator for Port Glenmore Men's Shed. She congratulates Liam and lets him know that he can claim a tax deduction for the contribution amount minus the benefit: $500 - $90 = $410.
End of exampleChecklist for planning a fundraising event
If your organisation is planning a fundraising event, you should:
- confirm your DGR status using ABN Look-upExternal Link
- check the event qualifies as an eligible fundraising event
- check you won't run 15 or more eligible events of the same type in one financial year
- calculate and document the GST-inclusive market value of benefits you're providing
- check whether the minor benefit rules apply
- clearly tell donors whether any part of their contribution is tax-deductible
- when the minor benefit rules apply, include the GST‑inclusive market value of any benefit they receive
- consider whether you will issue receipts
- if you do, ensure they meet ATO requirements for receipts.
More guidance is available at:
The bottom line
Payments at fundraising events are often not gifts for tax purposes. Whether your donors can claim a deduction depends on carefully applying the minor benefit rules and making sure all conditions are met.
By understanding these rules and valuing benefits correctly, your organisation can help your donors claim the correct deduction and feel confident supporting your cause.