What’s Changed: Community Charity Trusts and DGR Endorsement
- A new declaration — Taxation Administration (Community Charity Trusts and Corporations) Amendment (2026 Measures No. 1) Declaration 2026 — adds 34 more entities to the list of named entities under Division 426 of Schedule 1 to the Taxation Administration Act 1953 as community charity trusts eligible for DGR endorsement.(au.andersen.com)
- To qualify, these entities must also be registered as charities with ACNC and comply with the Taxation Administration (Community Charity) Guidelines 2025.(au.andersen.com)
Entity Setup: Steps and Considerations
Establishing your trust/corporation
- Structure choice: Decide between trust or corporation form—both can be declared as community charity entities but obligations differ.
- Constitution & governing documents: Include objectives that align with public charitable purpose, ensure donor records, governance, and control are clear.
- Charity registration: Apply with the Australian Charities and Not-for-profits Commission (ACNC) if not already registered.
Applying for DGR endorsement
- Once registered and declared under Division 426, you may apply to the ATO to be endorsed as a Deductible Gift Recipient, allowing donors to claim tax deductions. Ensure compliance with guidelines.(au.andersen.com)
- Be aware of timing: the declaration took effect 26 February 2026, but endorsement depends on satisfying all criteria.(au.andersen.com)
Maintaining Compliance Once Endorsed
- Annual obligations: Lodge charity return, financial statements, maintain ACNC registration.
- Use of funds: Must align with charitable purpose; improperly diverting funds risks loss of endorsement.
- Audit & reporting: Be prepared for scrutiny—regular reviews, transparency obligations.
Example
If a local environmental trust formed in mid-2025 is now included in the declaration, it must apply for ACNC registration, ensure its governing deed aligns with guidelines, then apply for DGR endorsement. Once approved, it can solicit donations that are tax-deductible for donors.
Opportunities & Risks
- Opportunities: Access larger donor base, increased fundraising capacity, stronger public trust, tax incentives increase attractiveness.
- Risks: Non-compliance can lead to revocation of DGR status, penalties or political risk, reputational damage.
Action Plan Checklist
| Action | Target Date |
|---|---|
| Identify if entity is included in new declaration | Immediately |
| Register with ACNC or verify existing registration | Within 1-2 months |
| Review governing documents & accounting practices against guidelines | Before applying for DGR endorsement |
| Apply for DGR endorsement with complete documentation | As soon as eligible |
| Implement regular compliance review process | Ongoing |
The recent expansion of community charity trusts eligible for DGR endorsement opens doorways for many organisations – setting up properly and staying compliant ensures they benefit long-term.