The Australian Government has tabled the final report of the Productivity Commission’s inquiry into philanthropy in Australia: Future foundations for giving.

The report makes several recommendations to strengthen the foundations of philanthropy, supporting the Government’s goal of doubling giving by 2030.

These include an overhaul of the Deductible Gift Recipient (DGR) system, which determines the charities that are eligible to receive tax-deductible donations.

“The system that determines which charities can receive tax-deductible donations has grown in an ad hoc way over decades and has no coherent policy rationale. The complexity and inconsistency of the system sees many charities that create clear community benefits miss out,” said Deputy Chair Dr Alex Robson.

Charities that work to prevent poverty, animal welfare charities, and charities that work across DGR categories in support of groups like women, young people and Aboriginal and Torres Strait Islander people are just some of the groups facing barriers to inclusion in the current system.

“Our report proposes an overhaul of the DGR system that would make it simpler, fairer, and focused on activities that are likely to generate the greatest net benefits for the community,” said Dr Robson.

It is expected that the recommended changes would increase the number of charities that can receive tax deductible donations from about 25,000 charities to around 30,000 to 40,000 charities.

The report also proposes the establishment of a new organisation that would improve access to philanthropy for Aboriginal and Torres Strait Islander people.

“Some Aboriginal and Torres Strait Islander communities are furthering their own goals and aspirations through partnerships with philanthropy. The foundation would facilitate new collaborations between philanthropy and Aboriginal and Torres Strait Islander communities that support their ambitions,” said Commissioner Julie Abramson.

The report recommends reforms that would improve the regulatory framework for charities, supporting the role of the Australian Charities and Not-for-profits Commission’s (ACNC) charity register in providing further useful information for donors.

“This report has been informed by consultation and submissions from thousands of Australians in the charity sector and the wider community. We are confident our recommendations would create a stronger, fairer foundation for Australian philanthropy to support giving into the future,” said Dr Robson.

 

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