The Treasury Department has called for submissions commenting on a new discussion paper around Deductible Gift Recipient (DGR) reform.  Read the paper here.

Submissions are due by 4 August – as per the website – the discussion paper had 14 July as the deadline but there has been an extension.

Some Background

DGR has been around since 1915 and there are 51 different categories including 4 separate registers – for overseas aid, harm prevention, environmental organisations and cultural organisations.

There are no sunset clauses for most DGR organisations and eligibility is not regularly reviewed.  Some DGRS are also required to maintain a separate public fund, which creates further compliance obligations.

Some key points

The proposed changes suggested in the discussion paper do not relate to eligibility of DGR organisations, but focus on activities rather than purpose, and perhaps distressingly, suggest requiring environmental charities to spend 25% of their budgets on direct environmental remediation.  There is also a slightly punitive flavour to the wording around advocacy.

While this may not affect all charitable organisations, I am concerned that once we start singling out sectors for special treatment or scrutiny, then there is no telling how far restrictions may go for everyone else.

I encourage anyone with a direct interest in the DGR and nonprofit sector to put in a submission – even if only to address some of the points brought up – to show solidarity and to have your say.

A few organisations have been circulating some drafts for a unified response.  You can contact me directly if you would like to know about how to access these.

I look forward to seeing and hearing your comments on this – either to Treasury or here.