• Not for Profit Organisations
• Incorporated Bodies
• Deductible Gift Recipient Status

• Not for Profit Organisations
• Incorporated Bodies
• Deductible Gift Recipient Status

Non-profit organisations operate in many areas of society. They can include:

• Church Schools
• Churches
• Community child care centres
• Cultural societies
• Environmental protection societies
• Neighbourhood associations
• Public museums and libraries
• Scholarship funds
• Scientific societies
• Scouts
• Sports clubs
• Surf lifesaving clubs
• Traditional service clubs

A non-profit organisation is one which is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organisation is operating and when it winds up.
Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.

Source: www.ato.gov.au

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Non-profit organisations operate in many areas of society. They can include:

• Church Schools
• Churches
• Community child care centres
• Cultural societies
• Environmental protection societies
• Neighbourhood associations
• Public museums and libraries
• Scholarship funds
• Scientific societies
• Scouts
• Sports clubs
• Surf lifesaving clubs
• Traditional service clubs

A non-profit organisation is one which is not operating for the profit or gain of its individual members, whether these gains would have been direct or indirect. This applies both while the organisation is operating and when it winds up.
Any profit made by the organisation goes back into the operation of the organisation to carry out its purposes and is not distributed to any of its members.

Source: www.ato.gov.au

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Why incorporate?
An association that remains unincorporated has no separate legal identity from its members and must rely on individuals to do things for it in their own names.

As the management committee members are the ones who normally make and implement decisions for an association, the ultimate responsibility for debts and other legal obligations will usually rest with them.

This will be the situation even if the association is operating according to a written constitution or set of rules.

Incorporation provides relatively inexpensive protection for management committee members against the possibility of being personally responsible for the organisation's debts and liabilities.

Although this protection is not absolute, it does offer protection to management committee members who carry out their responsibilities in good faith and with care, diligence and skill.

Incorporation is a system of registration that gives an association certain legal advantages in return for accepting certain legal responsibilities.
Generally, incorporation under the provisions of the Associations Incorporation Act 1981 is available to any association that is formed or carried on for any lawful purpose except those designed for the purpose of financial gain for its members.

An incorporated association receives recognition as a legal entity separate from its members. Once incorporated, an association has all the powers of an individual and is legally able to do things in its own name, such as own land, sign a lease, or appear in court.

Although there are benefits to be gained from incorporation, there are also obligations and limitations. Incorporation requires the payment of application fees, obliges the association to be audited annually and lodge annual financial returns, requires that the association comply with the provisions of the Associations Incorporation Act regarding the running of the association and may require the association to hold a public liability insurance policy.

For further information visit the Office of Fair Trading website.

Source: Queensland Office of Fair Trading website.

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Why incorporate?
An association that remains unincorporated has no separate legal identity from its members and must rely on individuals to do things for it in their own names.

As the management committee members are the ones who normally make and implement decisions for an association, the ultimate responsibility for debts and other legal obligations will usually rest with them.

This will be the situation even if the association is operating according to a written constitution or set of rules.

Incorporation provides relatively inexpensive protection for management committee members against the possibility of being personally responsible for the organisation's debts and liabilities.

Although this protection is not absolute, it does offer protection to management committee members who carry out their responsibilities in good faith and with care, diligence and skill.

Incorporation is a system of registration that gives an association certain legal advantages in return for accepting certain legal responsibilities.
Generally, incorporation under the provisions of the Associations Incorporation Act 1981 is available to any association that is formed or carried on for any lawful purpose except those designed for the purpose of financial gain for its members.

An incorporated association receives recognition as a legal entity separate from its members. Once incorporated, an association has all the powers of an individual and is legally able to do things in its own name, such as own land, sign a lease, or appear in court.

Although there are benefits to be gained from incorporation, there are also obligations and limitations. Incorporation requires the payment of application fees, obliges the association to be audited annually and lodge annual financial returns, requires that the association comply with the provisions of the Associations Incorporation Act regarding the running of the association and may require the association to hold a public liability insurance policy.

For further information visit the Office of Fair Trading website.

Source: Queensland Office of Fair Trading website.

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OBTAINING DGR STATUS

What is deductible gift recipient (DGR)?
Certain organisations can receive income tax deductible gifts. They are called deductible gift recipients (DGRs). The income tax law determines which organisations and types of organisations can qualify.
Some DGRs are listed by name in the income tax law. They include organisations like Amnesty International Australia, Landcare Australia Limited and the Australian Academy of Science. There are also prescribed private funds listed by name in the income tax regulations. For other organisations to be DGRs, they must fall within a general category set out in the income tax law. Examples include public benevolent institutions, public universities, public hospitals and school building funds.
All DGR categories (except those listed by name in the income tax law or regulations) need to be endorsed by the Tax Office. If they are not endorsed donors cannot claim income tax deductions for their gifts.
Are you entitled to DGR endorsement?
To work out your entitlement you should first check if you fall within one of the categories of DGR set out in the DGR table – general categories.

As well as falling within a DGR category, you need to:

• have an Australian Business Number (ABN) - you can Register Online for an ABN;
• maintain a gift fund; and
• be in Australia (with some exceptions).

These requirements are explained further in Deductible gift recipients - other conditions.

Applying for DGR endorsement
If you work out you are entitled to be endorsed, you should apply to the Tax Office using the Application for endorsement as a deductible gift recipient. If you have an ABN, you can obtain one of these forms by contacting the Tax Office on 1300 130 248. Refer to Deductible gift recipients - other conditions for more information on the application process.

Being endorsed as a DGR
Being endorsed as a DGR gives your organisation important income tax concessions and obligations.
Endorsed DGRs need to regularly review whether they are entitled to endorsement, including whether they are still maintaining a gift fund. Worksheets are provided to help entities review their DGR endorsement.
A DGR must tell the Tax Office if it ceases to be entitled to endorsement.
The Tax Office can carry out its own review of a DGR's entitlement to endorsement and can revoke endorsement where the entity:

• is not entitled to be endorsed
• fails to maintain a gift fund
• does not give the specified information on recipients, or
• does not provide information or documents within the specified time after a request from the Tax Office.

 All DGRs (whether they are endorsed or listed by name in the income tax law) must provide specified information when they issue receipts for tax deductible gifts. Receipts must state:

• the name of the fund, authority or institution to which the gift has been made
• the DGR's ABN (if any), and
• the fact that the receipt is for a gift.

Source: www.ato.gov.au/nonprofit/content.asp?doc=/content/8781.htm 

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OBTAINING DGR STATUS

What is deductible gift recipient (DGR)?
Certain organisations can receive income tax deductible gifts. They are called deductible gift recipients (DGRs). The income tax law determines which organisations and types of organisations can qualify.
Some DGRs are listed by name in the income tax law. They include organisations like Amnesty International Australia, Landcare Australia Limited and the Australian Academy of Science. There are also prescribed private funds listed by name in the income tax regulations. For other organisations to be DGRs, they must fall within a general category set out in the income tax law. Examples include public benevolent institutions, public universities, public hospitals and school building funds.
All DGR categories (except those listed by name in the income tax law or regulations) need to be endorsed by the Tax Office. If they are not endorsed donors cannot claim income tax deductions for their gifts.
Are you entitled to DGR endorsement?
To work out your entitlement you should first check if you fall within one of the categories of DGR set out in the DGR table – general categories.

As well as falling within a DGR category, you need to:

• have an Australian Business Number (ABN) - you can Register Online for an ABN;
• maintain a gift fund; and
• be in Australia (with some exceptions).

These requirements are explained further in Deductible gift recipients - other conditions.

Applying for DGR endorsement
If you work out you are entitled to be endorsed, you should apply to the Tax Office using the Application for endorsement as a deductible gift recipient. If you have an ABN, you can obtain one of these forms by contacting the Tax Office on 1300 130 248. Refer to Deductible gift recipients - other conditions for more information on the application process.

Being endorsed as a DGR
Being endorsed as a DGR gives your organisation important income tax concessions and obligations.
Endorsed DGRs need to regularly review whether they are entitled to endorsement, including whether they are still maintaining a gift fund. Worksheets are provided to help entities review their DGR endorsement.
A DGR must tell the Tax Office if it ceases to be entitled to endorsement.
The Tax Office can carry out its own review of a DGR's entitlement to endorsement and can revoke endorsement where the entity:

• is not entitled to be endorsed
• fails to maintain a gift fund
• does not give the specified information on recipients, or
• does not provide information or documents within the specified time after a request from the Tax Office.

 All DGRs (whether they are endorsed or listed by name in the income tax law) must provide specified information when they issue receipts for tax deductible gifts. Receipts must state:

• the name of the fund, authority or institution to which the gift has been made
• the DGR's ABN (if any), and
• the fact that the receipt is for a gift.

Source: www.ato.gov.au/nonprofit/content.asp?doc=/content/8781.htm 

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