What is the definition of a DGR Charity and what is not included?
Have you heard about DGR charities but are not sure what it refers to or why it’s important?
A DGR charity stands for a Deductible Gift Recipient charity. It is an organisation that has been officially endorsed by the Australian Taxation Office (ATO) and recognised as eligible to receive tax-deductible donations.
Supporters who gift to a DGR charity can then deduct the amount donated from your taxable income in your annual tax return and thereby reduce the tax owed.
The Fred Hollows Foundation is not just a DGR endorsed charity but is also registered with the Australian Charities and Not-for-profits Commission (ACNC). This means our supporter’s contributions are fully tax deductible under Australian law.
Find out more about The Fred Hollows Foundation here.
Why Does Being a DGR Charity Matter?
The legal classification of a Deductible Gift Recipient (DGR charity) is covered under Division 30 of the Income Tax Assessment Act 1997 (Cth).
The Act outlines the ATO’s ability to grant DGR status to organisations that meet specific eligibility criteria. But why does it matter for supporters of The Foundation?
Your support goes further
Being able to deduct the donation you make to The Foundation from your taxable income means the real cost of your donation is less than the amount you give.
Your peace of mind
A DGR charity is more than just a tax-related form of recognition. It is a mark of accountability and trustworthiness. You can rest assured your support is going to an organisation that meets the ATO’s compliance standards.
For The Fred Hollows Foundation, DGR status means our supporters can give with complete confidence that every eligible gift is recognised fully under Australian tax law.
How Does a DGR Charity Differ From a Registered Charity?
There is understandable confusion around the difference between a DGR charity and a registered charity.
What is a registered charity?
Charity registration simply confirms that an organisation exists and operates for a charitable purpose.
It is managed by the Australian Charities and Not-for-profits Commission (ACNC).
However, just because a charity is registered does not automatically mean that it is a DGR charity, and therefore does not mean that your donations are necessarily tax deductible. An organisation can be a registered charity without being a DGR
DGR status is a separate application and independent endorsement, and it is managed by the ATO, not the ACNC.
Takeaway: Only donations to DGR-endorsed organisations are tax deductible in Australia. Before claiming a tax deduction, make sure the organisation has DGR status and not just ACNC registration.
Fortunately, The Fred Hollows Foundation holds both active DGR status and operates as a registered charity.
Are there Two Types of DGR Endorsement in Australia?
Yes, there are actually two different types of DGR organisations:
- DGR 1
- DGR 2
What is a DGR 1 charity?
These are the more common types of organisation, like The Foundation. It is the ATO-endorsed organisation that actually provides charitable services, such as a hospital, overseas aid provider or animal welfare society.
These charities rely on the public gifts, grants and distribution from the second category of DGR status: DGR 2.
What is a DGR 2 organisation?
These are the funding organisations that do not engage directly in charitable activities but collect the donations and provide them to the DGR 1 charities.
They can only fund directly to a DGR 1 charity (and not other DGR 2 organisations) and are ATO-endorsed specifically as an ancillary fund under tax law.
What difference does it make to you?
For most supporters, the practical difference between a DGR 1 and DGR 2 status is minimal. In both cases, your eligible donations are fully deductible from your next Australian tax return.
What Conditions Must a Donation Meet to Be Tax Deductible?
It is important to understand that just because you are providing money to a DGR charity, does not mean that all contributions or support automatically qualify for a tax deduction.
To claim a deduction, the gift must not just be made to an active DGR charity but:
- Be a genuine, voluntary gift from which you do not receive a material benefit in return (such as raffle tickets, merchandise, event tickets, and similar items).
- Be supported by a valid tax receipt from the charity.
The Fred Hollows Foundation issues a tax receipt automatically for every eligible donation. And if you are one of our generous monthly supporters, we will send you an annual giving statement covering the full financial year, so there is no need to track each individual payment.
Why Give to a DGR Charity Like The Fred Hollows Foundation?
Sure, the tax benefit of gifting to The Foundation is real, but for our supporters it is our mission to end avoidable blindness globally that inspires gifting.
Each year we provide hundreds of thousands of eye operations and treatments, train thousands of health workers and distribute millions of doses for treatable eye diseases. Plus, our team works across 25 countries worldwide, so when you support us, you know your gift is helping to restore sight and independence for people.
Make your tax deductible donation today.
Frequently Asked Questions About a DGR Charity
Does a charity have to have DGR status to be tax deductible in Australia?
Yes, only gifts to DGR-endorsed organisations can be claimed as deductions on an Australian tax return.
Is every registered charity in Australia a DGR?
No, it is not. Charity registration sits with the ACNC whilst the DGR endorsement is a separate process and administered by the tax office.
A charity can be legitimately ACNC-registered without having DGR status.
How do I check if a charity is a DGR?
The easiest way to verify whether a charity or organisation is DGR endorsed is by searching the charity's name or ABN on ABN Lookup or the ACNC Charity Register. Both online databases show whether the organisation has a current DGR endorsement status.
Is The Fred Hollows Foundation a DGR charity?
Yes, it is. The Foundation is a DGR 1 charity as well as:
- Being an Australian Public Company
- Being registered with the Australian Charities and Not-for-profits Commission (ACNC)
- Being a Health Promotion Charity endorsed for GST concessions, Fringe Benefit Tax and Income Tax exemptions
You can verify this at any time on the ABN Lookup by using ABN 46 070 556 642.
Plus, The Foundation is also endorsed under the Overseas Aid Gift Deduction Scheme (OAGDS).
Are monthly donations to a DGR charity tax deductible?
Yes. Regular recurring gifts, including monthly donations, are treated as separate eligible donations in the financial year each payment is processed.
Can I claim a tax deduction for a donation made overseas?
In many cases, only donations to Australian-registered DGR organisations are deductible from your taxable income in Australia. However, The Fred Hollows Foundation is an Australian-registered charity with DGR endorsement that includes its overseas aid fund, so The Foundation’s supporters’ gifts are fully tax deductible.
Learn more about tax deductible giving
A guide to claiming a donation on your tax return
Do you need a receipt to claim your donation?
How much of my donation is tax deductible?