A new deductible gift recipient (DGR) category for community sheds is currently in a bill before Parliament and could be available from 1 October 2020. The new DGR category will apply to public institutions that are registered as a charity under the Australian Charities and Not-for-profits Commission Act 2012 (Cth) and satisfy the definition of a community shed.
Requirements for DGR status
A “community shed” is a public institution that:
- seeks to promote mental health and preventing or relieving social isolation;
- primarily advances the above purposes through the provision of a physical location at which individuals are supported to undertake a range of activities (including work on projects) and in the company of others; and
- have open membership to members of the public.
This may include Men’s Sheds, Women’s sheds and other community shelters open to the public.
Why is DGR status important?
This new category is a significant step forward and may open the door for many non-for-profit organisations to gain DGR status. Organisations with DGR status can receive donations and contributions for which donors are able to claim an income tax deduction for gifts of $2 or more. As noted in the Treasury’s Consultation Paper, the “DGR tax arrangements are intended to encourage philanthropy and provide support for the not-for-profit”.
Currently, many community centres are precluded from accessing the DGR concession as they do not qualify as a Health Promotion Charity (HPC). HPC eligibility is reserved exclusively for charities having the principal purpose of promoting the prevention or the control of human diseases.
Most community centres were seen as generally promoting health or wellbeing and missed out on the benefits of DGR status, leaving many critical community organisations without access to charity tax incentives. The new DGR category is intended to be broader than the criteria for a HPC in order to recognise the diversity and localised nature of community centres.
FAL Lawyers is well-placed to assist community organisations in registering as a charity and applying for DGR status.
Contact us to find out how we can help your charity.
 Australian Taxation Office, Extending deductible gift recipient status to Men’s Sheds and Women’s Sheds (community sheds)
 Exposure Draft Explanatory Materials (Treasury Laws Amendment (2020 Measures No. 2) Bill 2020), Item 1.1.
 Australian Taxation Office, Gifts and donations.
 The Treasury, New Deductible Gift (DGR) category for Men’s Sheds and Women’s Sheds (20 January 2020 – 14 February 2020).  Australian Charities and Not-for-profits Commission, Health Promotion Charities.
 Australian Charities and Not-for-profits Commission, Health Promotion Charities.