Allow Animal Advocacy Charities to Receive DGR Status

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Author: Tammy Groombridge | Publish date: 02/04/2025

Problem Identification: 

In Australia, only animal welfare charities that provide ‘direct care to animals’ can access Deductible Gifts Recipient (DGR) status. 

Item 4.1.6 in Division 30.45(1) of the Income Tax Assessment Act 1997 (Cth) states that to access DGR status, the primary purpose of an animal welfare charity must be ‘the direct care to animals’ and registration with the Australian Charities and Not-for-profits Commission (ACNC). 

This means that not every animal welfare charity can receive tax-deductible donations. Specifically, many animal advocacy organisations fall outside this definition and are limited in their capacity to incentivise charitable contributions from the community and larger donors. The Stronger Charities Alliance highlights that lacking DGR status can make it ‘extremely difficult’ for charities to access contributions from major donors, philanthropic trusts, and foundations. Hence creating significant challenges for sustainable financing. 

Context: 

DGR status refers to an entitlement where donations made to a DGR-endorsed charity are deductible from a donor's income tax. This means that when a donor makes a gift or contribution to a DGR-endorsed charity, they may be able to claim a tax deduction. The claim amount will depend on the type of gift or contribution they make. This makes them more attractive to individuals and businesses looking to donate.

The Australian Alliance for Animals (AAA), Animal Defenders Office (ADO), and Vegan Australia have called to redefine animal charities under the current DGR status criteria so that animal advocacy charities can access DGR status. AAA shares that this could help address the issue of ‘entire groups or species of animals being overlooked or underrepresented for DGR status’.

Further, two 2024 Australian Government inquiries, the Productivity Commission Inquiry into Philanthropy and the Blueprint Expert Reference Group (BERG) NFP Sector Development Blueprint, have recommended expanding DGR status to encompass a broader array of charities, including animal charities.

There is international precedent for granting tax-deductible status to animal advocacy organisations. In the USA, the Internal Revenue Code grants tax-deductible status to all animal charities. 

Solution Identification: 

Repeal item 4.1.6 in Division 30.45(1) of the Income Tax Assessment Act 1997 (Cth) to remove the requirement that the primary purpose of an animal welfare charity must be ‘the direct care to animals’, to access DGR status.

This could allow individuals and businesses to donate tax-deductible amounts to a broader array of charities and increase philanthropic support for animal advocacy organisations. 

Advice:

The Assistant Minister for Charities should repeal item 4.1.6 in Division 30.45(1) of the Income Tax Assessment Act 1997 (Cth) to remove the requirement that an animal welfare charity's primary purpose be ‘the direct care of animals' to access DGR status.

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Public Support: 

1. Australian Alliance for Animals

2. Animal Defenders Office

3. Vegan Australia 

4.  The Law Society of New South Wales Young Lawyers

5.  Stronger Charities Alliance

6. Fundraising Institute of Australia

7. Productivity Commission Inquiry into Philanthropy 

8. Blueprint Expert Reference Group (BERG) NFP Sector Development Blueprint,

Where to go to learn more: 

1. Australian Alliance for Animals Submission to the Productivity Commission Review of Philanthropy - Read the complete submission here

2. The Law Society of New South Wales Young Lawyers Submission to the Productivity Commission on the Review of Philanthropy - Read the full submission here

3. Animal Defenders Office Submissions in Respect of the Productivity Commission’s Inquiry into Philanthropy - Read the full submission here

4. Vegan Australian Submission to the Productivity Commission's Philanthropy Inquiry - Read the full submission here

5. Stronger Charities Alliance Submission for the Philanthropy Inquiry - Read the complete submission here

Human Perspective:

David, the founder of a small animal advocacy charity, faced constant challenges securing sustainable funding. His organisation focused on animal rights lobbying, but because it didn’t qualify for Deductible Gift Recipient (DGR) status, attracting large donations was problematic—many donors preferred tax-deductible contributions.

This all changed with a proposed amendment to the Income Tax Assessment Act 1997 (Cth) Div 30, item 4.1.6. The amendment expanded the definition of charitable organisations to include animal advocacy groups like his. When the amendment passed, it transformed the organisation’s prospects.

With DGR status, David’s charity experienced a surge in donations, gained attention from philanthropic foundations, and finally secured the financial support needed to grow his team and expand its advocacy efforts. This legislative change created a brighter future for his organisation and strengthened their ability to fight for a brighter future for their cause.

To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences, and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.

Conflict of interest/acknowledgment statement: 

Appointed NSW Department of Climate Change, Energy, the Environment and Water - Animal Ethics Committee member.

Support 

If your organisation would like to add your support to this paper or suggest amendments, please email Info@foreaustralia.com. 

Reference list: 

Animal Defenders Office. (2023). Submissions in respect of the Productivity Commission’s Inquiry into Philanthropy Dear Productivity Commissioners. https://www.pc.gov.au/__data/assets/pdf_file/0005/359780/sub184-philanthropy.pdf 

Australian Alliance for Animals. (2023). Submission to the Productivity Commission Review of Philanthropy.  https://static1.squarespace.com/static/61c2724e42bafd1109690e02/t/64656967f5c57300140b906c/1684367724308/20230505+Animal+welfare+charities+submission+-+PC+Philanthropy+Inquiry.pdf 

Australian Charities and Not-for-profits Commission. (2023). Self-Assessed Income Tax Exempt organisations | ACNC. Acnc.gov.au. https://www.acnc.gov.au/self-assessed-income-tax-exempt-organisations 

Australian Taxation Office. (2016). Animal welfare charities. https://www.google.com/url?q=https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/getting-started/in-detail/types-of-dgrs/dgr-table-deductible-gift-recipient-categories/welfare-and-rights&sa=D&source=docs&ust=1732709799853937&usg=AOvVaw0aK984a-PQ7kTR-1Mmg1QL 

Australian Taxation Office. (2024a). DGR categories. Www.ato.gov.au. https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/getting-started/getting-endorsed-for-tax-concessions-or-as-a-dgr/is-my-organisation-eligible-for-dgr-endorsement/dgr-categories 

Australian Taxation Office. (2024b). Welfare and rights | Australian Taxation Office. Ato.gov.au. https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/getting-started/in-detail/types-of-dgrs/dgr-table-deductible-gift-recipient-categories/welfare-and-rights 

Department of Social Services. (2024, November 27). Not-for-profit Sector Development Blueprint. Department of Social Services. https://www.dss.gov.au/panels-and-other-groups/resource/not-profit-sector-development-blueprint 

Godfrey, K., Pai, R., Murn, N., Wang, L., Allen, T., Haslett, E., & Alapakkam, S. (2023). Submission on the Review of Philanthropy. https://www.lawsociety.com.au/sites/default/files/2023-06/230518%20Submission%20on%20the%20Review%20of%20Philantrophy.pdf 

IRS. (2019). Exempt purposes - internal revenue code section 501(c)(3) | internal revenue service. Irs.gov. https://www.irs.gov/charities-non-profits/charitable-organizations/exempt-purposes-internal-revenue-code-section-501c3 

Open Philanthropy. (2021, July 24). Farm Animal Welfare - Open Philanthropy. Open Philanthropy -. https://www.openphilanthropy.org/focus/farm-animal-welfare/ 

Productivity Commission. (2024). Inquiry Report - Future Foundations for giving. Pc.gov.au. https://www.pc.gov.au/inquiries/completed/philanthropy/report 

Responsible Investment Association Australasia. (2021). Annual Report 2020-21. Responsible Investment Association Australasia (RIAA). https://responsibleinvestment.org/resources/media-releases/ 

Treasury. (2024a). Deductible Gift Recipient specific listing | Treasury.gov.au. Treasury.gov.au. https://treasury.gov.au/policy-topics/taxation/dgr-specific-listing-applications 

Treasury. (2024b, January 1). Income Tax Assessment Act 1997. Www.legislation.gov.au; scheme=AGLSTERMS.AglsAgent; corporateName=Office Parliamentary Counsel; address=Locked Bag 30 Kingston ACT 2604; contact=+61 2 6120 1400. https://www.legislation.gov.au/C2004A05138/latest/versions 

Vegan Australia. (2024, August 10). Tax Office urged to allow tax deductible donations for all animal charities - Vegan Australia. Vegan Australia. https://veganaustralia.org.au/submission/tax_office_urged_to_allow_tax_deductible_donations_for_all_animal_charities/