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How to access greater End Of Financial Year (EOFY) Donations

27
May
2020

Access greater End Of Financial Year Donations

With the Bunning’s sausage sizzle and other fundraising activities off the table, getting a piece of the $748m of annual donations from Australia’s biggest philanthropists has become even more critical – but also a step easier.

The Federal Government has taken note of the community’s increased reliance on charity services during this Covid-19 pandemic while at the same time acknowledging that it has been harder to deliver these key services and fund raise. Measures announced earlier this month by Assistant Minister for Finance,Charities and Electoral Matters Senator The Hon. Zed Seselja include greater incentives for philanthropic funds to give more to charities this financial year.

What are the Government measures for PAFs & PuAFs?

The Government will amend the Public and Private Ancillary Fund Guidelines where a fund makes distributions for the 2020 and 2021 income years that are at least 4% above the required minimum distribution threshold, giving the fund a credit equal to half the surplus distributions (in percentage rather than dollar terms).

The Australian Tax Office’s (ATO) minimum requirements for these organisations is that must distribute at least 5% of the market value ofthe fund’s net assets (as at the end of the previous financial year). For PuAFS, this is 4%.

This credit may be used in future years to reduce the minimum distribution required by the fund by up to one percent per year, until all the credits are exhausted.

With the significant increased demand for the essential services and support from many charities, the government measures incentivise these Private & Public Ancillary Funds to make higher distributions in the 2020 and 2021 income years.

With almost 60% of Australia’s giving Foundations have a financial year end of 30th June, meaning some will be considering taking up the Government’s new measures.

How can my charity get access to this?

Firstly it is important to get your organisation's Impact Suite Social Impact Rating. Donors off all shapes and sizes appreciate organisations that are transparent with their governance, and communicate what their social impact is.

PuAFs and PAFs can only donate to charities that are Deductible Gift Recipients (DGRs). Donations and transfers to these funds are tax deductible, subject to the PAFs & PuAFs distributing a minimum amount each year to DGRs. So it is important your organisation has a DGR fund or status.

Organisations seeking to establish a DGR are encouraged to phone the ATO’s Not-for-Profit advice line on 1300 130 248 between 8:00am and 6:00pm AEST, Monday to Friday, or emailing atoendorsements@ato.gov.au outside of these times.

If your organisation has donors wanting to leave significant gifts that are to be given over time, these donors can establish their own family’s PAF, or give to a PuAF to facilitate managed giving. Contact us for more information here or speak to your wealth adviser.