Why would our Men’s Shed want to be registered as a “DGR”?

  • What is a “DGR”?

    “DGR” stands for “Deductible Gift Recipient”

    Being registered as a DGR means that a Men’s Shed that is registered as a DGR can offer a tax-deductible receipt to donors who give them gifts.

    (Cash donations and gifts-in-kind to Men’s [Community] Sheds are not tax deductible for the donor unless the Men’s Shed is registered as a DGR).

  • Why would a Men’s Shed bother to get registered as a DGR?

    Whilst it is common for donors to Men’s Sheds not to ask for a tax-deductible receipt, there are some donors and grantmakers who require the Men’s Shed to be registered as a DGR before they can make a donation or give a grant. The most likely donors and grantmakers who will require DGR registration include most trusts and foundations.

    The ATO advises: As a general guideline, foundations are only permitted to fund organisations that have one or both of the following charitable endorsements from the ATO:

    • Endorsement as a Deductible Gift Recipient

    • Endorsement as an income tax-exempt charitable entity OR notice of endorsement for charity tax concessions

Examples include the Queensland Community Foundation (QCF) which has over 252 sub-funds offering grants for a wide range of projects. QCF provides more than 300 grants annually that broadly fall into the following categories:

  • health and medical

  • research

  • community

  • indigenous

  • children and youth

  • animal welfare

  • disability

  • environment

  • religion

  • arts

  • culture

The ANZ Community Foundation is another such fund that aims to support projects run by charitable organisations which offer a direct and tangible benefit to local communities.

The top 50 Philanthropic Foundations in Australia gave away a total of $964 million in 2020-21

  • How can my Men’s Shed get registered as a DGR?

Getting endorsed as a DGR involves completing an online application. If your Shed is already registered as a charity with the ACNC it is a simple process. If your Shed is not yet registered with the ACNC, then your Shed needs to apply first and can create their DGR application at the same time.

  • Eligibility: The ATO advises “Community sheds (such as men's sheds and women's sheds) are not-for-profit organisations that provide a range of activities for their members with the purpose of advancing mental health and preventing or relieving social isolation. From 1 October 2020, a new general category of deductible gift recipients (DGR) for community sheds is available.”

  • Constitution: The ATO advises that the Constitution must have a dominant purpose that has words to the effect the purpose is “advancing mental health and preventing or relieving social isolation” and have an open membership policy in its constitution but may include a “men or women only” clause.

  • Registered with ACNC: The Shed must be registered as a charity with the Australian Charities and Not for Profit Commission (ACNC) and have an Australian Business Number (ABN)

  • Why bother to register with the ACNC?

    Philanthropic foundations and Trusts are great sources of funding, particularly for larger-scale projects such as new sheds, major renovations, and costly machinery.

    The Queensland State and Australian National laws and regulations relating to not-for-profit organisations like the Men’s Sheds are changing. It is expected that the regulation of not-for-profit organisations and charities in Australia will progressively be transferred to the Commonwealth government and the ACNC. Your Shed should be ready for the changes and consider the benefits of registration with the ACNC as a charity and with DGR status.

    More information is available on the ATO website at www.acnc.gov.au. In particular, visit their Community Sheds page.

Author: Dr Ted Flack, Doctor of Philosophy, Nonprofit Studies