When can a charity receive tax deductible donations to promote culture within Australia?
Not-for-profit organisations established in order to promote or foster culture may be able to be registered as charities with an ‘advancing culture’ subtype with the Australian Charities and Not-for-profits Commission (ACNC). Registered charities benefit from charity tax concessions, including income tax exemption.
Many kinds of charities can promote culture, including:
- theatre and dance companies;
- community choirs;
- arts festivals;
- literature societies;
- organisations that preserve and protect the arts or languages of Australian indigenous persons;
- radio broadcasters for particular ethnic groups;
- faith based music and arts funds;
- film and television;
- circus groups; and
- railway societies.
Charities may promote culture in a range of ways, including:
- creating artistic or cultural works themselves;
- exhibiting works produced by others;
- carrying out research into arts and culture;
- educating the public about cultural forms;
- teaching people how to create cultural forms;
- preserving works of art or movable cultural heritage; and
- offering scholarships that promote the arts or cultural forms.
Charities that promote culture may be able to be endorsed as tax deductible gift recipients (DGRs) if they are:
Being endorsed as a DGR can improve a charity’s ability to attract donations from private individuals and foundations (some of which can only donate to DGRs). Endorsement as a DGR is also a prerequisite for some government grants.
To be eligible to be endorsed as DGRs, public libraries, museums and art galleries must be controlled by individuals or institutions who, because of their tenure or public office or position in the community, have a degree of responsibility to the community as a whole*. In the case of charities seeking entry on the ROCO, this requirement applies to the committee that operates the public fund (which may be a different group of individuals to the charity’s board).
Further specific requirements apply to each category of DGR which usually require (among other things) amendment of the charity’s governing document. In the case of charities seeking entry on the ROCO, these requirements are set out in detail in the ROCO Guidelines.
As with all charities, it is important to ensure the entity exists for the public benefit rather than using its resources for the benefit of those close to the charity. For example, there are detailed requirements that apply if a charity entered on the ROCO proposes to use tax deductible donations received by its public fund to construct or restore a building that will be owned by another entity or used partly for purposes other than the charity’s principal purpose.
How we can help
Moores regularly works with organisations that promote culture to support them to seek endorsement as a DGR. If we can assist your organisation, please get in touch.
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*You can find examples of individuals who meet this requirement here.