Deductions for "Dinner" Donations - The PM's Push

The Federal Government is about to deliver on its plan to encourage philanthropy in Australia by allowing tax deductibility on special fundraising events that offer a benefit to the donor.

From 1 July 2004 individuals will, in certain circumstances, be able to receive a tax deduction for the net amount of a donation made to a deductible gift recipient, which has an associated minor benefit.

The deduction will be available for cash donations above $250, where the value of the benefit received by the donor is no more than 10 per cent of the donation or $100, whichever is less.

Currently, if a deductible gift recipient holds a fundraising dinner, none of the cost of attending the dinner is deductible even if some of the payment is intended as a donation. Under this measure people will receive a tax deduction for the donation component of any payments to a deductible gift recipient.

For example, if a fundraising dinner cost $1000, but the market value of the dinner was $100 participants will be entitled to a $900 tax deduction.

This measure will not apply to fundraising events held by political parties, which are not deductible gift recipients.

This is yet another example of the PMCBP leading the way in making it easier for individuals to give to their communities. The new arrangements will enhance the ability of deductible gift recipients in Australia to use special events, such as dinners, to fundraise.

The initiative is the result of work by the Prime Minister’s Community Business Partnership (PMCBP). The PMCBP was established in 1999 to foster partnerships between business, government and the community. Since 1999 the Partnership has taken a leading role in making Australia’s taxation system friendlier to companies and individuals who want to give, helping deductible gift recipients attract donations.

The Minister for Family and Community Services, Senator Amanda Vanstone and the Minister for Revenue and Assistant Treasurer, Senator Helen Coonan will consult with the PMCBP on the implementation of the measure.

The President of the Fundraising Institute of Australia, NSW Chapter 2, Evelyn Mason says the initiative is a very welcome one for Australian fundraisers.

Mason says administering the donation component should not be difficult for organisations because they will know the actual cost of putting on the event within the normal budgeting process. Receipts are already issued for tickets to events and in future will include the donation element as well as the actual cost of the ticket.

Mason says she hopes this initiative will be the first of many more to encourage philanthropy via the Prime Minister’s Community Business Partnership Program.

If you would like to comment on this initiative why not join our on-line Forum at probonoaustralia.com.au.