You may want to establish a relief fund or organise a fundraising appeal or event to help people affected by a disaster, or give support to disaster victims.
In response to a disaster, you may want to run a fundraising event or appeal by collecting money, donating a portion of your sales, or crowdfunding. You need to be aware of the tax and reporting requirements, in particular goods and services tax (GST), for you, your business, or organisation. See Running Australian disaster relief funds.
You may arrange for an established deductible gift recipient (DGR) to collect the donations. A DGR will already have the required infrastructure in place to collect gifts that are tax deductible and issue receipts to donors. See gifts and fundraising.
Setting up a tax-deductible appeal
If you, your business or organisation wants to establish a tax-deductible appeal fund, you need to consider whether you, your business or organisation (or the fund) can be endorsed by us as a DGR business collecting donations.
If you are a not-for-profit but not a DGR, find out about collecting to help victims of disaster.
You should also be aware of your tax situation and whether you need to:
- pay tax on the proceeds you receive from the event – see Income and deductions for business
- apply GST to your taxable sales – see GST and fundraising
- consider if there are fringe benefits or exempt fringe benefits for the emergency assistance.
Phone us on 1300 130 248 to ask about fundraising events and setting up an appeal fund.
If you're involved in crowdfunding, whether a promoter, intermediary or contributor, you need to be aware of your tax and reporting requirements. The promoter and intermediary may need to be registered for GST and pay GST on crowdfunding income.
Most crowdfunding donations are not tax deductible because they're not made to a DGR.
Example: gifts made to a crowdfunding platform – not deductible
Sam creates a crowdfunding page to raise money for animals injured by bushfires. People donate money directly to Sam. Sam is not a registered charity with the ACNC and he doesn't have DGR status from us.
People may give any amounts they want to Sam, but they will not be able to claim a tax deduction for those gifts.End of example