25 July 2024
On the 18th of July, the Productivity Commission publicly released their ‘Future foundations for giving’ report in relation to the philanthropy inquiry.
The report makes a number of recommendations to support the Government’s goal of doubling philanthropic giving by 2030.
The inquiry included consultation with more than 3,000 submissions and two weeks of public hearings in February featuring representation from more than 50 interest groups including Commonwealth, state and territory governments, the philanthropic, not‑for‑profit and business sectors and the general public.
A key finding in the inquiry was that the ‘Deductible Gift Recipient’ (DGR) system is not fit for purpose as a mechanism for determining which entities should be eligible to receive indirect government support through tax-deductible donations.
The report states that there is no coherent policy rationale for why certain entities are eligible for DGR status and others are not.
Also, that the complexity of the system continues to increase as new DGR endorsement categories are added in a piecemeal manner leading to a DGR system that creates inefficient, inconsistent and unfair outcomes for donors, charities and the community.
The Commission has made 19 recommendations across four key areas as follows:
- Reforming the Deductible Gift Recipient system;
- Establishing an independent organisation to strengthen relationships between Aboriginal & Torres Strait Islander organisations and philanthropic networks;
- Reforms to enhance the regulatory framework for charities and ancillary funds; and
- Creating more transparency around charities and giving, including by publishing aggregate information on corporate giving and by requiring listed companies to be more transparent.
Andrew Leigh, Assistant Minister for Competition, Charities and Treasury issued a media release on the 18th of July noting that the Government will consider its response to inquiry.
The Government is anticipated to act on many of the recommendations and it is likely that we will see a raft of changes that will affect individuals and charities/not-for-profits.
We will keep readers informed of the Government response to the inquiry as news comes to hand.
In the meantime, please get in touch if you have any questions about the inquiry.
Sky Accountants Ballarat
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