Amendments to encourage increased grants

Assistant Minister for Finance, Charities and Electoral Matters Zed Seselja has announced that the federal government is creating an incentive for philanthropic funds to support charities in times of need.

A recent JBWere report estimated that charitable giving might decrease by 7.1 per cent in 2020, and by a further 11.9 per cent in 2021 because of the pandemic.

'I will be amending the ministerial guidelines for public and private ancillary funds to provide a credit for funds that make total distributions in 2019-20 and 2020-21 that are at least four percentage points above the minimum required distributions.  The credit – equal to half the percentage points by which the distributions exceed the minimum – may be used to reduce the minimum distribution by up to one percentage point in 2021-22 and future financial years until [it] is exhausted,' the minister said.

Mr Seselja also declared COVID-19 a disaster for the purposes of establishing Australian disaster-relief funds as DGRs, allowing them to receive tax-deductible donations. 

'This declaration will allow funds that are established for the relief of people affected by the COVID-19 pandemic to receive tax-deductible donations, and greater assist their communities.'

Donations to the funds will be tax-deductible when made within two years.

Disaster-relief funds will need to apply for formal endorsement with the ACNC.

For further information see https://www.legislation.gov.au/Details/F2020L00684.