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You can only claim a tax deduction for a gift or donation to an organisation that has the status of a deductible gift recipient (DGR).
To claim a deduction, you must be the person that gives the gift or donation and it must meet the following 4 conditions:
- It must be made to a DGR.
- It must truly be a gift or donation – that is, you are voluntarily transferring money or property without receiving, or expecting to receive, any material benefit or advantage in return. A material benefit is something that has a monetary value.
- It must be money or property – this can include financial assets such as shares.
- It must comply with any relevant gift conditions – for some DGRs, the income tax law adds conditions affecting the types of deductible gifts they can receive.
DGRs sometimes authorise a business to collect donations on their behalf. For example, a supermarket may be authorised to accept a donation at the register that they then send onto the DGR. You can claim a deduction for a gift or donation you make in this way, if:
- it meets the 4 conditions above
- you have a receipt from the third party.
If you receive a material benefit in return for your gift or donation to a DGR – for example, you purchase a ticket to a fundraising dinner – it's considered a contribution and extra conditions apply.
To claim a deduction, you must have a record of your donation such as a receipt.
A DGR is an organisation or fund that registers to receive tax deductible gifts or donations.
Not all charities are DGRs. For example, crowdfunding campaigns are a popular way to raise money for charitable causes. However, many of these crowdfunding websites are not run by DGRs. Donations to these campaigns and platforms aren't deductible.
You can check the DGR status of an organisation at ABN Look-up: Deductible gift recipientsExternal Link.
The amount you can claim as a deduction depends on the type of gift:
- Gifts of money – you can claim the amount of the gift, but it must be $2 or more.
- Gifts of property or shares – there are different rules depending on the type and value of the property – see Gift types, requirements and valuation rules.
- Gifts under the Heritage and Cultural programs – there are special circumstances where donations can also be deductible – see:
If you receive a token item for your donation you can still claim a deduction. Token items are things of no material value that are used to promote the DGR, such as lapel pins, wristbands and stickers.
You claim the deduction for your gift in the income year in which you give the gift. In some circumstances you may elect to spread the tax deduction over a period of up to 5 income years.
If you made one or more small cash donations, each of $2 or more, to bucket collections – for example, to collections conducted by a DGR for natural disaster victims – you can claim a total tax deduction of up to $10 for those donations for the income year without a receipt.
To claim donations of more than $10, you need a receipt.
Political party and independent candidate donations
In some circumstances, you can claim a deduction for gifts and donations to registered political parties or independent candidates.
This includes paying a membership subscription to a registered political party.
You must have made the gift or donation as an individual (not in the course of carrying on a business) and it can't be a testamentary donation.
Your gift or donation must be worth $2 or more. If the gift is property, the property must have been purchased 12 months or more before making the donation.
The most you can claim in an income year is:
- $1,500 for contributions and gifts to political parties
- $1,500 for contributions and gifts to independent candidates and members.
To claim a deduction, you must have a written record of your donation.
For more information see Claiming political contributions and gifts.
You can't claim gifts or donations that provide you with a personal benefit, such as:
- raffle or art union tickets – for example, an RSL Art Union prize home
- items such as chocolates, mugs, keyrings, hats or toys that have an advertised price
- the cost of attending fundraising dinners (you may be eligible to claim a deduction as a contribution if the cost of the event was more than the minor benefit supplied as part of the event)
- club membership fees
- payments to school building funds made in return for a benefit or advantage – for example, as an alternative to an increase in school fees or placement on a waiting list
- payments where you have an understanding with the recipient that the payments will be used to provide a benefit to you
- gifts to family and friends, regardless of the reason
- donations made under a salary sacrifice arrangement
- donations made under a will.
You can't claim a tax deduction for donations made to social media or crowdfunding platforms unless they are a registered DGR.
Example: material benefits where a deduction can't be claimed
Robbie is an office worker. Each year his workplace gets involved in the Daffodil day appeal to raise money and awareness for the Cancer Council. Robbie buys a teddy bear toy on Daffodil Day at a cost of $30.
Robbie can’t claim a deduction for the cost of the toy as he has received a material benefit in return for his contribution to the Cancer Council.End of example
Keep records for all tax deductible gifts and contributions you make.
Evidence you need to keep may include:
- receipts for donations or contributions
- a signed letter from the eligible organisation confirming the amount of your donation or contribution.
If you receive a minor benefit (for example, a charity dinner) as a benefit for your contribution, the value of the benefit needs to be shown.
Most DGRs will issue you with a receipt for your donation, but they're not required to. If you don't have a receipt, you can still claim a deduction by using other records, such as bank statements.
If a DGR issues a receipt for a deductible gift, the receipt must state:
- the name of the fund, authority or institution to which the donation has been made
- the DGR's Australian business number (ABN) (some DGRs listed by name in the law may not have an ABN)
- that it is for a gift.
If you give through a workplace giving program, your evidence can be from either:
- your income statement or payment summary
- a receipt from a third party or a written record from your employer.
You can use the myDeductions record-keeping tool in the ATO app to keep track of your expenses and receipts throughout the year. If you have an electronic copy of your receipts that are a true and clear reproduction of the original, you're not required to keep the original paper copy.
For more information, see Keeping a record of your donation.Deductions for gifts or donations you make to deductible gift recipients, and the records you need.