1/09: New DGR category for Community Sheds

The ATO has advised that the new Deductable Gift Recipient category for community sheds has received Royal Assent as of last Thursday, meaning that community sheds who wish to obtain DGR status can apply as of 1 October 2020.

To be DGR endorsed, community sheds must be registered with the ACNC as a charity. The ACNC has streamlined the application process for community sheds.

The ATO and ACNC are hosting free webinars for community sheds:

• Information on how to become DGR endorsed, how to apply, and ongoing responsibilities: 21 September, 11am-12:30pm (AEST)
• Information on how to become a registered charity: 14 October, 12pm-1pm (AEDT)

For more information on eligibility and how to apply for DGR endorsement, visit the ATO webpage here.
 

1/09: Government announces easing of red tape for charitable fundraising

This week the federal government announced measures intended to reduce fundraising red tape for charities, with the release of a discussion paper on a proposed cross-border recognition model. The proposed model would allow a charity registered with the ACNC to be automatically deemed as holding an authority in all participating Australian states and territories.

Philanthropy Australia welcomes the government’s adoption of some of our policy recommendations to #FixFundraising. While the proposed model is a promising first step, we hope to see more tangible measures introduced in the future to remove burdensome reporting requirements for charities. We need a cohesive road map from government on how current conduct and reporting requirements will be harmonised and modernised.

Our friends at Justice Connect are leading the way on pushing for fundraising harmonisation and have a detailed page on their website with resources on the proposed changes and guides to what you can do to support the campaign to #FixFundraising.

Philanthropy Australia will be drafting a submission and welcomes feedback from our members. If you have any questions or input, please email our Director of Policy and Research Sarah Wickham directly at swickham@philanthropy.org.au.

31/08: Government launches inquiry into the state of the arts

The Standing Committee on Communications and the Arts is currently accepting submissions as part of its latest inquiry into the cultural and economic significance of the arts in Australia, as well as the impact of COVID-19 on creative industries.

Arts bodies and organisations are encouraged to make a submission, either through the official webpage or by emailing communications.reps@aph.gov.au by 22 October 2020. Alternatively, interested parties can share their thoughts by participating in an online survey.  

For more information, visit the Committee’s webpage or read the official media release. 

7/05: Amendments to ancillary funds guidelines and COVID-19 disaster DGR status  

On Wednesday the Assistant Minister for Charities, Senator Zed Seselja, made two announcements to incentivise giving to support charities in response to COVID-19:  

New amendments to ancillary funds guidelines  

The amendments to the ministerial guidelines for public and private ancillary funds are to provide a credit for funds that make total distributions in 2019-20 and 2020-21 that are at least four percentage points above the minimum required distributions. The credit – equal to half the percentage points by which the distributions exceed the minimum – may be used to reduce the minimum distribution by up to one percentage point in 2021-22 and future financial years until the credit is exhausted.  

Treasury has confirmed that the intent of these amendments is the total distribution in the two years is four percentage points or greater than the minimum to be eligible for the credit in future years. For example: 

Private Ancillary Fund 

If a private ancillary fund distributes 7 percent in both years, the requirement is satisfied because the total distribution is four percentage points higher than the minimum  
If it distributes 8.5 percent in one year and 5.5 percent in the other it would also meet the eligibility test and so on for the many other combinations, subject to the 5% minimum distribution being made in each year

​Public Ancillary Fund  

If a public ancillary fund distributes 8 percent in both years, the requirement is satisfied because the total distribution is four percentage points higher than the minimum  
If it distributes 7.5 percent in one year and 4.5 percent in the other it would also meet the eligibility test and so on for the many other combinations, subject to the 4% minimum distribution being made in each year 

The federal government also confirmed that if an ancillary fund has special circumstances affecting their ability to meet the minimum distribution requirements during this time, they may still apply to the ATO Commissioner to request a reduction.  

Philanthropy Australia welcomes the announcement by the federal government which will encourage ancillary funds to increase their granting during this time of immense need. We are waiting to receive the written guidance regarding this announcement and will update members as we receive further information.  

Government declares COVID-19 as a disaster – relief funds able to access 2-year DGR status 

The Federal Government also declared COVID-19 a disaster for the purpose of establishing Australian disaster relief funds as DGRs, allowing these funds to receive tax-deductible donations.  

Donations to Australian disaster relief funds, established to provide relief from the COVID-19 pandemic, will be tax deductive when made within two years from 18 March 2020 (when the Federal Government officially announced COVID-19 as a pandemic).  

Disaster relief funds will need to apply for formal endorsement as a DGR fund with the ATO. This requires charity registration with the ACNC. Organisations seeking to establish a DGR Fund should contact the ATO’s Not-for-Profit advice line on 1300 130 248 or email atoendorsements@ato.gov.au   

Philanthropy Australia is still waiting to receive the written guidance regarding this announcement. We will update members once we have further information.  

Philanthropy Australia appreciates the collaborative dialogue we’ve had with the Assistant Minister for Charities and the Australian Government over ways we can support the work of the not-for-profit sector during this challenging time. These announcements are part of a broad set of policy recommendations that Philanthropy Australia is advocating to government to strengthen the critical role philanthropy can play during this crisis. 

For more information you can read the Assistant Minister’s media release here  
For the initial information received regarding how your Ancillary Fund can take advantage of the recently announced amendments to give more during this critical time please read here  
For more details on Philanthropy Australia’s COVID-19 policy priorities please read here 
For information regarding how Australian Philanthropy leaders are stepping up and responding to community needs during this unparalleled challenge please read our public statement here 

27/04: Further amendments to the JobKeeper legislation to support charities eligibility  

On Friday the Federal Government announced further amendments to the JobKeeper rules including:  

• employees employed through a special purpose entity, rather than an operating entity 
• charities and the treatment of government revenue 
• religious practitioners 
• the ‘one in, all in’ principle 
• full time students aged 16 and 17 years old 
• international aid organisations, and universities. 

These amendments provide charities with the option to include or exclude government revenue from this test, to ensure the eligibility of charities aren’t adversely affected where they are delivering significant services that are funded by government. It has also opened eligibility to international aid organisations listed on the Overseas Aid Gift Deductibility Scheme. 

The detail for these changes are available here:  
https://www.legislation.gov.au/Details/F2020L00546 

The Assistant Minister for Charities included the following information to the sector recently:  

I draw your attention to the below section in the Explanatory Statement, that sets out the ability for charities receiving government revenue to elect to exclude employees fully funded by this revenue from the JobKeeper program. 

Employees of charities paid under government grants  

Subsection 10A(5), recognising the unique nature of charities, provides an exception to the ‘one-in all-in’ principle that applies to nominating employees as eligible employees under the JobKeeper Scheme. Under this exception, ACNC-registered charities that have elected to disregard certain government grants when calculating their decline in turnover that have employees whose salary and wages are fully funded by those government grants may choose not to ask these employees to nominate as eligible employees for the purposes of the JobKeeper scheme. This choice is available only where the employer reasonably believes that the full amount of the employee’s salary and wages is funded for the relevant fortnight by a grant that has been disregarded in calculating GST turnover as a result of subparagraph 8(8)(h)(i).   

Whilst the exemption created under 10A(5) is voluntary, I would expect eligible charities to utilise this exemption to ensure that the JobKeeper is not paid to employees who are continuing to be fully funded by the taxpayer. I trust that charities will use this discretion to protect jobs while also ensuring taxpayer funds are used appropriately. 
 

9/04: Federal Government Passes $130 billion JobKeeper Payment Legislation

Yesterday the Federal Government passed the $130 billion JobKeeper Payment legislation.
This is the single largest piece of government spending in Australian history, with around 6 million Australians expected to receive $1,500 a fortnight.

On Monday evening the Treasurer confirmed that the eligibility threshold for the payment will be decreased to 15% for registered charities, one of the five COVID-19 recommendations we put to Government. Decreasing the threshold will result in significant support to thousands of charities and their staff, who are doing critical frontline work in supporting communities through COVID-19 and in some instances, working towards a vaccine. Read more about Philanthropy Australia welcoming the Government announcement, and acknowledging the critical advocacy from the social sector in our media release.

Philanthropy Australia looks forward to sharing the JobKeeper eligibility requirements as Treasury releases additional guidance in the coming days.

Below are key insights from the Minister, Shadow Minister and sector leaders:

2 April video message from Assistant Minister for Charities Zed Seselja
Pro Bono News (6 April): ‘We don’t run like normal businesses’: Charities still locked out of JobKeeper payments
Shadow Minister for Charities Andrew Leigh MP (8 April): an interview with Tony Jones and speech in the House of Representatives

3/04: Philanthropy Australia’s advocacy to the Government on COVID-19

On Tuesday this week, Philanthropy Australia met with the Assistant Minister for Charities, Senator Zed Seselja to discuss the role philanthropy is playing in tackling COVID-19, opportunities for closer collaboration between philanthropy and Government to support our charities and additional incentives the Government could consider to stimulate more giving during this time.

During this meeting Philanthropy Australia provided the following recommendations for the consideration of the Government:
 

• Providing a 150% tax deduction for any donations to deductible gift recipients (DGRs) over the next two financial years – meaning that donors could deduct 1.5 times the value of their donations to DGRs from their taxable income
• Increase working capital into registered charities by:
  • Launching an Item 1 DGRs flow through grant pool with matched funding from government and philanthropy to provide discretionary grants to fund charities overhead costs to keep them afloat and delivering their work both during and after the crisis. This pool would be focused on supporting registered charities with an annual turnover of $5 million or less
  • Establishing a Loan facility/fund for registered not-for-profits, with the support of the banks, at cash rate, where philanthropy takes the first loss capped at 5%, with a government guarantee coming in thereafter. This facility would be to support the not-for-profits who have the underlying cash flow and business models that are likely to be re-established
     
• No change to the regulatory minimum distribution requirements for public and private ancillary funds and the provision of credits for funds who ‘over distribute’ by at least 4% over the next two financial years, with these credits able to be used to reduce minimum distributions in subsequent financial years
• Flexibility on the eligibility threshold for JobKeeper Payment to enable more charities to access the payment

Philanthropy Australia continues to work closely with key partners on the detailed specifics of the above recommendations. Once we receive confirmation if the Government is committed to any of these measures we will update our community
This week our Board approved a public statement on Australian Philanthropy’s Response to the COVID-19 Crisis, which will be released on Monday 6 April. We look forward to sharing this statement with our community and the public at the beginning of next week
The first meeting of the newly established Charities Crisis Cabinet met on Tuesday, led by Susan Pascoe and Tim Costello. This meeting focused on setting the framework for the group and information sharing, we look forward to sharing more details with our community over the coming weeks  

26/03: Providing support during COVID-19 pandemic

• Philanthropy Australia undertook targeted advocacy in partnership with a range of social sector leaders last week to secure commitment from the Government to provide financial support measures for the charitable sector.
• We are currently working on a collective public statement signaling the critical role philanthropy should be playing to tackle COVID-19 – we will released on week commencing 6 April.
• In partnership with the Australian Communities Foundation we launched a free online COVID-19 granting platform for Australia allowing charities across Australia to register their funding needs and enable philanthropic funders to understand the granting opportunities available to respond to the critical and immediate needs of the sector.
• We continue to have regular communication with the Assistant Minister for Charities regarding the role of philanthropy in responding to the COVID-19 challenge.
• We have launched dedicated COVID-19 Resources, information and a member discussion forum for members on the Better Giving Hub.
• We have launched a dedicated public page on our website sharing COVID-19 information and resources for the sector and the community.

18/03: Response to COVID-19

• The need for more and better philanthropy in Australia has never been more profound, as our community feels the increasing social and economic impacts of COVID-19 so shortly after the catastrophic bush fires and floods of the summer. Philanthropy has a critical and leading role to play in helping us all to understand, respond to and address the challenges of COVID-19 and this rapidly evolving public health situation, and in supporting communities to develop their resilience for the recovery process.
• Australia’s charitable sector employs over 1.3 million people, rely on the contributions of over 3.5 million volunteers and contributes 8% of Australia’s GDP. Our charities are vital to our economy and our communities. Right now, many Australian charities are facing a battle to survive. Fundraising activity is grinding to a halt, staff are being laid off and volunteering has slowed.  These changes are also impacting significantly on the services our sector can provide to support the most vulnerable members of our community get through COVID-19. The current estimated loss of over 260,000 jobs across Australian charities would create a negative impact on the Australian economy of $41.8 billion.  
• Philanthropy has a critical role to play to get our charities through COVID-19 and last week, we released guidance on how philanthropy could respond to COVID-19 – we encourage you to read and share this widely within the sector.