Clarity on charity
Tags: tax deductions
Not all charities are the same – some are not charities at all. So, how do you ensure that your money finds its way into the right hands... and if it is indeed tax deductible? It pays to do a little research first.
There’s no shortage of charities competing for donations, and for many people the charity chosen is emotionally driven. For example, the cause may be something they feel strongly about, or a way of commemorating a loved one.
Whatever the cause, it’s essential that donated funds are used appropriately and that donors are comfortable with the charity’s operations.
The way the charity utilises donations is largely outside of your control, but there are a few questions you can ask before entrusting your money to them.
1. Is it a legitimate charity?
Sometimes a charity name might seem familiar but if you have any doubts you can cross-check its location details and registration status on the federal government’s Australian Charities and Not-for-profit Commissions register at www.acnc.gov.au.
Beware of relying on a general internet search for verification as anyone can set up a website or social media page.
If you have been approached personally, always ask for identification which displays:
- the full name of the organisation
- an Australian Business Number (ABN)
- a physical business address
2. Are all donations tax deductible?
Donations of two dollars or more are tax deductible only if the charity has been endorsed by the Australian Taxation Office (ATO) as a deductible gift recipient (DGR) organisation.
The best way to be certain is to visit the Australian Business Register (ABR). See www.abn.business.gov.au and conduct a search on the charity’s name or ABN.
3. How do you make a complaint?
Complaints about charities must be made to the relevant state or territory regulator. To find the correct regulator, visit the ATO’s website www.ato.gov.au and search for “fundraising”.
It’s not just about money
It’s often assumed that individual donations are the only way to assist a charity but there are many other ways you can help out. You could:
- Leave a bequest in your will – contact the charity to discuss your intentions.
- Donate your time – many charities are short on professional expertise. What skills do you have?
- Arrange a workplace fundraiser – see the ATO’s web-page www.ato.gov.au and search for “workplace giving programs”.
People support charities because it’s good to help a worthy cause. However, it’s easy to feel betrayed if funds are squandered or the charity is suspect.
With just a little research you can put your mind at ease and know that your donation is going to those who need it most.
ASIC’s MoneySmart website www.moneysmart.gov.au Managing my money – Donating
Australian Charities & Not-for-profit Commission www.acnc.gov.au
Australian Business Register www.abn.business.gov.au
Australian Tax Office – www.ato.gov.au Gifts and Fundraising