Fundraisers Not Pushing 'Property' Gift Giving
Monday, 4th February 2002 at 12:02 pm
Despite major changes to the tax deductibility of donations of property in recent years, it still appears to be one area that the Not for Profit sector is resisting in its gift giving drives.
In 1999, the rules about the giving of property to organisations able to offer tax deductibility of gifts, were changed to allow property donations valued in excess of $5000 to be tax deductible.
Previously gifts of property acquired by the donor in the previous 12 months would not have been tax deductible gifts because the gift was neither cash nor trading stock disposed of outside the ordinary course of business.
Example: Alexis donates her farm in the Australian Capital Territory (ACT) to the Royal Society for Prevention of Cruelty to Animals (ACT) Incorporated on 1 September 1999. She has owned the property since 1979. She has the farm valued by the Commissioner at $200,000. She is now entitled to a deduction for the amount of the valuation, that is, $200,000.
From 1 July 2002, the rules will be further amended to allow a donor like Alexis to apportion her gift over 5 years so that, for example, she could claim a tax deduction of $40,000 for each year. That’s a very real benefit to her if her taxable income were to be less than $200,000 in the year she makes the gift!
Associate Professor Myles McGregor Lowndes of the Centre of Philanthropy and Nonprofit Studies at Queensland University of Technology says that the new measures are designed to give effect to the government’s intention to encourage corporate and personal philanthropy.
However, Professor McGregor Lowndes says this type of giving has been under-used by many Not for Profits, who have often failed to sell it to donors as a gift giving option.
He says for many the tax provisions have been clouded by the introduction of the GST.
He says the Centre of Philanthropy and Nonprofit Studies will study the Australian Tax Office figures on the first year of the deduction regime and report on them in April.
He says in Britain similar tax provisions have been helped along by an enormous injection of funds to sell a wide variety of giving options to donors including property.
Under the banner of “Getting Britain Giving”, Professor McGregor says the promotional campaign is a concept that should be picked up in Australia.
The Centre of Philanthropy and Nonprofit Studies has produced a Fact Sheet on the new provisions for the Tax Deductibility of Donations of Property. If you would like an electronic copy send an e-mail to us here at Pro Bono Australia at firstname.lastname@example.org.
Footnote: Our current on-line Instant Poll shows that gift deductibility is the main tax issue concerning Not for Profits. Thankyou to all those who voted.