As we usher in the new year, 2024 brings about a significant change in the Deductible Gift Recipient (DGR) landscape in Australia. The Australian Taxation Office (ATO) is set to take on the administrative reins of four unique DGR categories, promising a more streamlined and efficient process for not-for-profit (NFP) organisations seeking endorsement. In this blog, we’ll delve into the details of these changes and explore how they can benefit your NFP clients.
Effective January 1, 2024, the ATO will assume responsibility for administering and assessing all DGR categories, including environmental organisations, harm prevention charities, cultural organisations, and developing country relief funds or organisations (formerly known as overseas aid funds). This marks a pivotal shift, consolidating administrative functions under one umbrella, and is poised to bring about several positive changes.
Streamlining the Application Process:
One of the key advantages of this change is the promised streamlining of the DGR application process. With all categories falling under the ATO’s purview, organisations can expect a more cohesive and standardised application experience. This not only reduces the administrative burden on NFPs but also ensures a consistent approach across all DGR categories.
For NFPs, time is of the essence. The shift to ATO administration is expected to significantly reduce the time taken to secure DGR endorsement. By centralising the process, organisations can anticipate quicker turnarounds and more efficient outcomes. This is particularly beneficial for those amid applications or those planning to apply for DGR endorsement soon.
Consistency Across Categories:
Uniformity is a cornerstone of the new DGR measures. The ATO’s oversight of all categories ensures a standardised approach, promoting consistency in the application and assessment procedures. This harmonisation aims to provide clarity for NFPs navigating the DGR landscape and fosters a more transparent and accessible system.
To ease the transition, specific provisions have been put in place for organisations already endorsed in the four unique DGR categories or those with ongoing applications. If your clients fall into these categories, rest assured that their existing endorsements will continue, provided they meet eligibility criteria. Organisations with ongoing applications will seamlessly transition to the ATO from January 1, 2024, without the need to restart the process.
For NFPs considering DGR endorsement or amid an application, the time to act is now. Applications for the four unique DGR categories can still be submitted to the relevant government departments until December 31, 2023. After this date, the ATO will take the helm, ushering in a new era of efficiency and consistency.
The upcoming changes in the DGR landscape present a positive shift for not-for-profits in Australia. With the ATO at the helm of all DGR categories, organisations can look forward to a more streamlined, time-efficient, and consistent process. As we embrace the changes on January 1, 2024, let’s anticipate a future where obtaining DGR endorsement is a smoother journey for the organizations making a meaningful impact in our communities.