Conditions for a tax-deductible contribution
If you run a fundraising event, your supporters may make contributions that give them a minor benefit. As they get a benefit, they have not made a gift; however, they may claim a portion of their contributions as a tax deduction if the contribution meets certain conditions.
If the supporter does not benefit from the donation, it may still be tax-deductible as a gift.
Fundraising events held by political parties are ineligible for this concession. If the contribution is made to a political party, see Claiming political contributions and gifts.
To be tax deductible, the contribution must:
- be made by an individual
- be made to a deductible gift recipient
- comply with any extra conditions that apply to some DGRs
- be for an eligible fundraising event, which is a DGR fundraising event conducted in Australia, including
- fetes, balls, gala shows, dinners, performances and similar events
- events involving sales of goods if selling these goods is not a normal part of the supplier's business
- events that we have approved as a fundraising event
- be any of the following
- money over $150 (if the eligible event is a fundraising auction, contributors can only claim a deduction for contributions of money)
- property purchased during the 12 months before making the contribution and valued at more than $150
- property valued by the Commissioner at more than $5,000
- shares acquired at least 12 months before making the contribution and valued at $5,000 or less but more than $150 that meet all the following conditions
- contributed shares must be in a listed public company and be listed for quotation on an Australian stock exchange
- the contribution must be made on or after 1 July 2007
- not have a benefit received by the contributor that is more than 20% of the value of the contribution or $150, whichever is less.
Example 1 – Settling a bid with cash or property
Julie makes a successful bid at a DGR's charity auction. Julie will be eligible to claim a tax deductible contribution if she pays for the article in cash and it meets all the other conditions required for tax deductible contributions. If Julie attempts to settle her bid by an exchange of property, she cannot claim the value of the property as a tax deductible contribution, even if it meets the other requirements of this concession.
End of example
Example 2 – Market value when paying by shares
Gem contributes a parcel of shares for the right to attend a DGR's annual gala dinner fundraising event. The shares are in an Australian listed public company and were acquired by Gem 18 months before they were contributed to the DGR. At the time of making the contribution, the shares had a market value of $1,000. The value of the ticket to attend the fundraising event is $100. The DGR works out that Gem will be eligible to claim a tax deductible contribution of $900 ($1,000 - $100) because the market value of the:
End of example
- shares at the time of the contribution was less than $5,000 but more than $150
- ticket (the minor benefit received) does not exceed the lesser of $150 and 20% of the value of her contribution ($200).
The DGR is responsible for advising if any part of the contribution will be tax deductible.
To be eligible for the concession, the DGR cannot conduct the same type of event more than 15 times in a financial year.
Flowchart: Are contributions to a DGR fundraising event tax deductible?
Use this flowchart to work out if a contribution of money is a tax deductible contribution. Note: The flowchart does not cover contributions of property.
To be tax deductible as a contribution, the contribution must be made by an individual to a DGR for an eligible fundraising event. The contribution has to comply with any conditions that may apply to the DGR and may be money or property, depending on the type of event.