Neighbourhood Houses ‘dancing with DGR’

Deductible Gift Recipient status: part of the battle for realistic funding

Given the contribution by volunteers, the dedication of Coordinators and the wonderful community outcomes from the Neighbourhood House & Learning Centre Sector, it beggars belief Houses & Centres can’t benefit from community members or businesses who want to make a donation towards their good work. To my mind it makes it even worse that the ANHLC committee – already stretched on the funding battle – has to do the research into this situation as well…..surely this is policy development and should be undertaken by Government at one of our three citizen-funded levels?????

FYI here is the situation as set out in the ANHLC March/April News

What is DGR?

Deductible Gift Recipient (DGR) is an Australian Tax Office (ATO) endorsement given to organisations who wish to receive tax deductible gifts and/or philanthropic grants. There are two categories in the ATO Guidelines under which Neighbourhood Houses can apply:

• Education (TAFE)
• Welfare and Rights (Public Benevolent Institution [PBI]

Neither of these categories currently fit most Neighbourhood House core activities and/or purposes.

What is the aim of the DGR Research & Advocacy Project?

To position Neighbourhood Houses to access the full range of philanthropic grants and corporate giving (currently unavailable to any centre without DGR endorsement).

What is the current situation?

Consultation with a wide variety of key players in the political, legal and tax fields has shown that gaining DGR for the Sector is not going to be easy! The process is currently complex and would mean Houses would have to change fundamental principles, Constitutional Rules, Statements of Purpose and/or centre names to gain DGR status. This is primarily because the Sector has a ‘whole of community’ approach to their programs and activities. While this is the Sector’s strength, it is a disadvantage in terms of Australian tax laws.

Who’s got what?

The ANHLC mapping of the current ‘DGR picture’ shows that only 5% of Houses have DGR endorsement (under 20 for Victoria), with the majority having gained endorsement under the PBI category. Some indicated that the process to gain DGR endorsement was extremely lengthy and arduous.

More Houses have applied for DGR endorsement and failed than have succeeded! ANHLC is about to start national mapping of the sector.

What is planned?

The option of seeking changes to the DGR criteria in ATO guidelines so that Neighbourhood Houses have automatic eligibility has so far gained overwhelming support from the project reference group and participants at a recent DGR workshop (conducted at the ANHLC Conference). A recommendation for this has gone to the ANHLC Board for ratification.

It is acknowledged that this option will probably require a longterm political and legal campaign. However, with the information now at hand, together with the support being gained from a number of external sources (including MPs and government departments) the project reference group feels this is timely and worthwhile, particularly given that a federal election is proposed for late 2007.

For more info contact:

Glenda George or Kaz Mackay
Email dgr.status@yahoo.com.au
Phone: 0419 895 184 or 0419 377 909