Deductible gift recipient (DGR)

Definition

A deductible gift recipient (DGR) is an organisation that is eligible to receive tax-deductible donations in Australia. 

What is a deductible gift recipient?

Donors who make gifts or contributions to DGRs can claim a tax deduction for the amount donated, subject to specific rules and limitations outlined by the Australian Taxation Office (ATO). This tax incentive encourages generous giving and supports charitable organisations and causes.

DGRs are classified into various categories based on the purposes and activities of the organisations. These categories include charitable, educational, religious, cultural, environmental, and health-related organisations, among others.

Organisations seeking DGR status must apply for registration with the ATO and meet the criteria specified for their particular category. The ATO assesses each application to make sure that the organisation meets the necessary requirements, including having a charitable purpose and complying with relevant laws and regulations.

Once registered as a DGR, organisations have ongoing compliance obligations to maintain their status. This includes fulfilling reporting requirements, following governance standards, and ensuring that donations are used for the intended charitable purposes.

DGRs are expected to operate transparently and be accountable for the funds they receive. This includes providing financial statements, annual reports, and other disclosures to donors, regulators, and the public to demonstrate how donations are used to further their charitable objectives.

Example of a deductible gift recipient

The “Wildlife Guardians Association” is a registered charity dedicated to the preservation and protection of threatened species. It operates wildlife sanctuaries, conducts conservation research, and educates the public.

As a deductible gift recipient, donations made to the Wildlife Guardians Association are eligible for tax deductions. Individuals and businesses contributing to the organisation’s efforts to conserve wildlife can claim deductions on their tax returns.

In this example, the Wildlife Guardians Association serves as a DGR, enabling donors to receive tax benefits for supporting its charitable activities in wildlife conservation.