Funding Your Organisation

Foundations or Specific Funds

There are several ways of attracting donations for cultural activity that offer benefits both to donors, in the form of tax deductibility, and to recipients as an additional source of funding for projects.

The establishment of an independent philanthropic foundation or fund is one sustainable way to provide ongoing benefits for a community.

Such entities provide a legally recognised and easily accessible way for individuals and businesses to make tax deductible donations to their communities.

A foundation or fund receives donations, which are pooled to form a capital base which is invested. Only the income from the investment is used to fund community projects. In this way, a donor's gift continues to benefit the community year after year. The interest earned on investments is generally returned to the community through a mechanism such as an annual grants program.

Deductible Gift Recipient (DGR) Endorsement
It is necessary for the entity receiving donations to have DGR endorsement by the Tax Office. 

A not for profit cultural organisation can become endorsed as a DGR in its own right by listing on the Register of Cultural Organisations (see below) or the organisation may choose to establish and operate a fund which is the entity registered as a DGR.

If your organisation is endorsed as a DGR in its own right, gifts to the whole organisation will be tax deductible. Alternatively, if an organisation is endorsed for a fund, authority or institution it operates – for example, a public fund maintained by an organisation that is on the Register of Cultural Organisations (ROCO) – only gifts to that part of the organisation are tax deductible.

For endorsement, an organisation must have an Australian Business Number (ABN) and have acceptable rules for winding up and revocation.

Further information is provided on the following Australian Tax Office (ATO) fact sheets:

• The endorsement process for deductible gift recipients (NAT 3193)
• Gift fund requirements (NAT 3194) www.ato.gov.au/nonprofit/content/13268.htm

Only certain types of gifts to public funds on the register are tax deductible to donors. These include money ($2 or more), property, shares and trading stock. For more information refer to the Gift types chapter in the ATO publication GiftPack (NAT 3132).

Register of Cultural Organisations (ROCO)
Cultural organisations can apply to the Commonwealth Department of the Environment, Water, Heritage and the Arts (DEWHA) to be listed on the Register of Cultural Organisations.

Note that public art galleries, museums and libraries are not included on the Register as they are endorsed by the Australian Taxation Office under another Deductible Gift Recipient (DGR) category.

These bodies have the added benefit of being able to receive tax deductible donations of culturally significant items for their collections via the Australian Government’s Cultural Gifts Program (see http://www.arts.gov.au/tax_incentives/cgp).

To apply to have your organisation’s name listed on the Register of Cultural Organisations and gain endorsement as a DGR, you need to meet several requirements, including:

• Your principal purpose must be to promote literature, music, performing arts, visual art, craft, design, film, video, television, radio, community arts, Aboriginal arts or movable cultural heritage
• You must have an ABN and not distribute your assets or profits to members or owners.

If your organisation does not have an ABN, complete an Application for ABN registration for companies, partnerships, trusts and other organisations (NAT 2939).

The process for registration:

• Submitted applications are assessed by DEWHA
• Approximately every four months, the Minister for the Arts and the Treasurer consider each application and take a decision
• DEWHA advises each organisation in writing of the decision
• If entry on the ROCO is approved, the application form is sent on to the ATO for endorsement as a DGR
• The ATO advises the organisation that is has DGR status
• The organisation promotes its tax deductible status to potential donors, receives and issues official receipts for all tax deductible donations
• Every January and July, listed organisations provide information to DEWHA on all tax deductible donations received during the six month period using a Statistical Return of donations form
• Listed organisations advise DEWHA of any changes to personnel or funding processes
• Every three years, DEWHA reviews the eligibility of listed organisations to remain on the register.

Receipts for gifts
If your organisation is an endorsed DGR listed on the ROCO for a fund it operates, there are several things you must include on a receipt for a gift. You must state the name of the fund, authority or institution to which the gift has been made, your organisation’s ABN and that the receipt is for a gift your organisation has received.

An example of a receipt can be found in the Register of Cultural Organisations Guide 2007 - www.arts.gov.au

Further information
Ask DEWHA for, or go to the DEWHA website at www.arts.gov.au/roco and download, an Application for Register of Cultural Organisations. This form also includes the DGR endorsement application information the ATO needs.

Alternatively, contact:
The Administrator - Register of Cultural Organisations   
Department of the Environment, Water, Heritage and the Arts   
GPO Box 787, CANBERRA ACT 2601   
Phone: (02) 6275 9647 - Fax: (02) 6275 9659   
Email: roco.mail@pmc.gov.au