The peak body protecting and promoting the Australian visual arts sector

Deductible Gift Recipient (DGR) Reforms

Tax deductible gift recipient (DGR) status allows organisations to receive gifts and contributions for which donors are able to claim a tax deduction.

New reforms threaten advocacy work

Treasury’s review of the Deductible Gift Recipient (DGR) framework has implications for NFP organisations engaging in advocacy and other work considered as 'activism'.

While changes to the administrative process for obtaining DGR status are well overdue and will generally be of benefit to the arts community, new reporting requirements will limit the permissible amount of public debate and advocacy undertaken by organisations with DGR status.

Treasury’s Tax Deductible Gift Recipient Reform Opportunities discussion paper and recommendations appear specific to reducing the advocacy and campaign work from the environmental sector, however there are several non-profit sectors that these reforms could apply to, including the arts sector in Australia.

NAVA is concerned that these reforms threaten the important advocacy work that art organisations do. NAVA's history is a testament to the way this work contributes to lead effective and informed government policy-making.

In general, NAVA supports reforms that require all arts organisations seeking DGR to be registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC). However, we note that this will directly impact some small arts organisations which are currently not registered as charities but do have DGR status. This is particularly true of Incorporated Associations who have limited resources to manage the administration required by the current reporting structures. While the proposed changes will simplify the application process and streamline reporting, some small arts and community organisations will struggle with the additional burden of having to also audit their activities. They may also be required to amend their constitutions in order to comply and provision to assist those organisations needs to be considered.

Toolkit

The deadline to comment on proposed DGR reforms is 4 August 2017. NAVA strongly encourages the visual arts sector get behind this issue to protect our rights to advocate and recognise the important public service value that this work has on our sector.

You might like to cover the following points in your submission:

  • how important it is for you to be able to advocate - as is your legal right under the definition of charity 2013; or
  • how important it is to you that the organisations that you support, advocate for the issues you believe in or feel are important:

“A staggering 9 out of 10 respondents saw recognition of the role of advocacy as being the most important factor in developing a thriving Australian Not for Profit sector, with two-thirds rating it as extremely important. Survey respondents ranked the performance of advocacy and human rights as number one amongst all sector industry groups.” Pro Bono Sector Survey Report 2015: Gauging the State of the Not For Profit Sector

  • the political activities of charities are already well protected in Australian law.
  • the potential impact to your organisation of more regular activity auditing, particularly defining what could be considered to be advocacy work.
  • the impact of the requirement to register as a charity with the ACNC may have on your DGR status - eg. if you are a small incorporated association you may need to amend your constitution to be eligible and you will need time and resources to be able to do that.
  • it makes more sense that the transfer of administration from the four DGR Registers be to the ACNC rather than the ATO.

Email your submission to DGR@treasury.gov.au


Or post to:

Senior Adviser

Individuals and Indirect Tax Division

The Treasury

Langton Crescent

PARKES ACT 2600

Other resources

Defending Democracy, Human Rights Law Centre

Gauging the state of the not-for-profit sector, Pro Bono Sector Survey