DGR status is the ATO endorsement that makes donations to your organisation tax-deductible. ACNC registration alone does not do it.
- DGR is an ATO endorsement under Division 30 of the Income Tax Assessment Act 1997. It lets your donors claim a deduction on gifts of $2 or more. ACNC registration does not give you it.
- Check this first: look your organisation up on ABN Lookup and confirm the DGR field before you promise a donor anything. Your donors are increasingly checking it themselves before they give.
- What trips charities up: two regulators doing two different jobs. The ACNC registers charities; the ATO endorses DGRs. Of roughly 60,000 ACNC-registered charities, only about 41.5% hold DGR.
- Not tax-deductible, whatever your status: raffle tickets, gala and dinner tickets, auction items where the buyer receives something of value, volunteered time, and gifts to non-DGR charities. Bequests sit under separate estate rules.
- If you cannot be endorsed directly: most organisations have to fit one of the 52 DGR categories. Sports clubs usually go through the Australian Sports Foundation, and other umbrella or auspicing arrangements exist for community groups.
- Timing: the Australian financial year ends 30 June, which is when donors act on deductions.
If your donors are asking whether their contribution is tax-deductible, the answer comes down to one thing: whether your organisation is endorsed as a Deductible Gift Recipient (DGR) by the Australian Taxation Office (ATO).
Being registered with the Australian Charities and Not-for-profits Commission (ACNC) is not the same thing. Roughly 60,000 charities are ACNC-registered, but only around 41.5% of them hold DGR endorsement (ACNC Australian Charities Report). That gap trips up a lot of well-meaning organisations every year.
This guide walks through what DGR status actually means, who can get it, how to apply, and how to set up receipts your donors can use at tax time.
In this article:
Understand what DGR status actually means
DGR stands for Deductible Gift Recipient. It is an endorsement granted by the Australian Taxation Office (ATO) under Division 30 of the Income Tax Assessment Act 1997.
When your organisation holds DGR endorsement, donors who make a gift of $2 or more can claim that gift as a deduction on their personal income tax return. The canonical phrase used by Australian charities, and the one your receipts and website should mirror, is: "Donations of $2 or more are tax-deductible."
A few things worth noting from the start:
- The $2 threshold is the federal minimum. There is no upper limit on what a donor can claim, subject to normal ATO rules.
- The donor claims the deduction themselves on their annual income tax return. Your organisation does not reclaim tax on the donor's behalf (that is a UK mechanism called Gift Aid; it does not exist in Australia).
- From 1 January 2024, the ATO consolidated administration of all 52 DGR categories. Previously some categories were administered by other Commonwealth departments. That administration now sits entirely with the ATO.
If your organisation does not hold DGR endorsement, donations to you are not tax-deductible, even if you do genuinely charitable work and are ACNC-registered. This is the most important sentence in this article.
Check the difference between ACNC registration and DGR endorsement
These are two separate things done by two separate bodies. Confusing them is the single most common mistake Australian not-for-profits make when talking to donors.
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| Who does it | Australian Charities and Not-for-profits Commission (ACNC) | Australian Taxation Office (ATO) |
| What it means | Your organisation is a registered charity in Australia | Donors can claim a tax deduction on gifts of $2 or more |
| Does one give you the other? | No | No |
| How many organisations have it? | Around 60,000 charities | Around 41.5% of ACNC-registered charities |
| Where is it listed? | ACNC Charity Register | ABN Lookup (DGR field) |
The ACNC was established under the Australian Charities and Not-for-profits Commission Act 2012. It registers charities, maintains the public Charity Register, and works with state and territory regulators on compliance. What it does not do is make your donors' gifts tax-deductible.
That is the ATO's job, and the ATO does it separately, by endorsing your organisation as a DGR under the Income Tax Assessment Act 1997.
The ACNC's DGR fact sheet is the clearest plain-English summary of the difference. It is worth reading before you apply for either.
For organisations that are not yet ACNC-registered, your first step is usually registration with the ACNC before you can apply for DGR endorsement. If you are still working out your structure, a guide to starting a charity in Australia covers the registration pathway. If you are an incorporated association trying to work out whether your structure is the reason you cannot hold DGR directly, the guide to incorporated associations in Australia is a useful companion.
See who can be endorsed as a DGR (the 52 categories)
Not every charity qualifies for DGR endorsement. There is no generic "charity equals DGR" pathway. Your organisation must fit within one of the 52 DGR categories set out in Division 30 of the Income Tax Assessment Act 1997. The ATO's DGR categories table is the authoritative list.
The categories fall broadly into these families:
- Health, public hospitals, health promotion charities, research bodies.
- Education, school building funds, educational research, public libraries.
- Welfare, welfare and rights organisations, community child care.
- Environment, environmental organisations, conservation projects.
- Cultural and arts, art museums, cultural organisations.
- Disaster and emergency, disaster relief funds, rural hardship funds.
- Other public benefit, firefighting brigades, ancillary funds, overseas aid.
ATO eligibility guidance is the starting point to check whether your organisation's work aligns with a category before you invest time in an application.
A few practical points:
- Some categories require your organisation to be registered with the ACNC as a charity. Others do not. Check the category requirements specifically.
- Some categories are closed entry-point lists (e.g. a named environmental organisation must be prescribed by regulation). Most charities apply under the broad public-benefit categories.
- Fitting the category is necessary but not sufficient. The ATO also checks that your organisation meets governance standards and operates for the charitable purpose stated.
Apply for DGR endorsement with the ATO
Once you have confirmed your organisation fits a DGR category, the practical route is straightforward, though it takes time. Set aside several weeks for the process.
- 1. Register with the ACNC first (required for most DGR categories). If you are not yet ACNC-registered as a charity, complete that step before approaching the ATO. The ACNC application is free.
- 2. Get your ABN (Australian Business Number) if you do not already have one. You need an ABN to apply for DGR endorsement. Every ACNC-registered charity should have one.
- 3. Check the specific requirements for your DGR category using the ATO's DGR categories table. Some categories have additional conditions (e.g. having a specific type of committee, holding funds separately).
- 4. Apply via the ATO's online endorsement form through the ATO's not-for-profit organisations hub. You will need your ABN, organisational details, governing documents, and a description of your charitable activities.
- 5. Wait for the ATO's decision. Processing times vary. The ATO may request further information. Keep your governing documents current and your purpose statements clear.
- 6. Once endorsed, your DGR status will appear on ABN Lookup. Donors and supporters can verify it there. Update your website, donation page, and receipt templates immediately.
Zeffy does not provide legal, tax, or incorporation services, and cannot help your organisation obtain DGR endorsement. For free legal guidance on the application process, Justice Connect's Not-for-profit Law is the best starting point in Australia. Their resources on DGR eligibility are practical, free, and written specifically for small-to-mid not-for-profits.
Issue tax-deductible receipts your donors can actually claim
Once you hold DGR endorsement, your receipts need to contain specific information for a donor's tax deduction to be valid. A receipt that is missing any of these elements may cause the ATO to disallow the donor's claim.
Your tax-deductible receipt must include:
- Your organisation's full name, as it appears on the ACNC Charity Register and ABN Lookup.
- Your Australian Business Number (ABN).
- A DGR statement, for example: "Donations of $2 or more are tax-deductible."
- The amount of the donation.
- The date the donation was made.
The standard practice across Australian charities is to issue receipts within seven business days of the donation. For EOFY (End of Financial Year) giving, prompt receipting matters even more, because donors making last-minute gifts before 30 June need the receipt to lodge their return.
Zeffy issues tax-deductible receipts automatically for DGR-endorsed organisations, saving you the administrative work at the busiest time of year. One of our Australian users, Jamal (a DGR-endorsed charity), chose Zeffy specifically because the automated DGR receipts removed the burden of end-of-year paperwork. You can read more about setting up compliant receipting at our tax-deductible receipts guide for Australian charities.
The canonical trust formula: The Australian charities that donors trust most, from the Fred Hollows Foundation to Cancer Council to Australian Red Cross, all use a consistent formula on their donation pages and receipts. Mirror it closely:
Donations of $2 or more are tax-deductible. [Organisation name] is an ACNC-registered charity (ABN: XX XXX XXX XXX).
This phrasing is not just convention. It tells donors exactly what they need to know to claim their deduction, in the fewest words. Use it on your donation page, in your email appeals, and on every tax receipt.
Help donors verify your DGR status on ABN Lookup
Donors are increasingly checking DGR status before they give, especially for larger gifts ahead of EOFY. The tool they use is ABN Lookup, the Australian Business Register's free public search.
When a donor searches for your organisation on ABN Lookup, they will see a field labelled "DGR" in your ABN record. If you hold DGR endorsement, the record will show the DGR category you are endorsed under and the date from which endorsement applies. If the field is blank or absent, donations to your organisation are not tax-deductible, regardless of what your website says.
A few practical steps:
- Check your own ABN Lookup record as soon as you receive DGR endorsement from the ATO. Confirm the DGR field is populated correctly before you publish anything about tax-deductibility to donors.
- Include your ABN on your donation page and receipts. This lets donors verify your status directly from the receipt, without needing to search separately. The ABN Lookup DGR overview explains exactly what the record shows.
- Keep your registered details current. If your organisation's address, name, or structure changes, update the ABR. An out-of-date record can create donor uncertainty at exactly the wrong time.
If donors ask how to check your DGR status, point them to abr.business.gov.au and your ABN. It is a 30-second search.
Know what is NOT tax-deductible
DGR endorsement does not make every transaction with your organisation tax-deductible. The ATO's rules are clear on this, and it is important that your communications with donors are accurate. Overstating deductibility is a compliance risk for your organisation.
The following are NOT tax-deductible, regardless of your DGR status:
- Raffle ticket purchases. The buyer receives something of value (a chance to win), so the payment is not a gift. Raffle tickets are never tax-deductible.
- Fundraising dinner, gala, and event tickets. When a donor pays to attend an event and receives a meal, entertainment, or other benefit, the payment is not a deductible gift. (A donation made separately at the event, with no benefit received in return, can still be deductible if you are DGR-endorsed.)
- Auction items where the buyer receives something. If a donor wins an item at a silent or live auction, the payment is consideration for that item, not a gift. Not deductible.
- Volunteer time and services. The ATO does not permit deductions for the value of time or services provided to a charity. Only cash or property gifts qualify.
- Gifts to non-DGR organisations. Even if the receiving organisation is ACNC-registered and does genuinely charitable work, if it does not hold DGR endorsement, donations are not tax-deductible.
- Bequests in a will. Gifts left to charities in a will sit under separate estate and inheritance rules. They are not treated as tax-deductible donations in the standard sense. Refer donors with questions about bequests to an estate planning specialist, or point them toward a guide to gifts in wills in Australia for background.
Being clear about these limits in your communications protects your organisation and builds trust with donors. A donor who expects a deduction and cannot claim it will be frustrated; a donor who understands the rules in advance will appreciate the honesty.
Find a DGR pathway if you cannot get endorsed directly
Not every organisation can hold DGR endorsement in its own right. If you have checked the 52 categories and your work does not fit any of them cleanly, or if your structure creates a barrier, there are alternative pathways.
Sports clubs: the Australian Sports Foundation (ASF)
Most sports clubs and recreational organisations cannot obtain DGR endorsement directly, because sport is not a standalone DGR category. The Australian Sports Foundation (ASF) is the dedicated DGR umbrella pathway for Australian sport. When a sports club fundraises through ASF, donor gifts become tax-deductible because ASF itself is the DGR-endorsed entity. This is the standard pathway for a local football club, netball association, or swimming club that wants to offer tax-deductible receipts to its community.
Community groups and projects: auspicing arrangements
For community projects, social enterprises, and other organisations that do not fit a DGR category, auspicing (or fiscal sponsorship) arrangements exist. Under an auspicing arrangement, a DGR-endorsed organisation agrees to receive and administer funds on your behalf for a specific project. Donor gifts go to the DGR-endorsed auspice body, which issues the tax-deductible receipt.
Auspicing arrangements require a formal agreement and add administrative complexity. Justice Connect's Not-for-profit Law has practical guidance on auspicing for community groups.
Applying for endorsement directly
If your organisation's work genuinely fits a DGR category but you have not yet applied, the application process is free. The main investment is time. Many small charities delay applying because the process feels daunting. Justice Connect's Not-for-profit Law offers free legal resources that can help you assess eligibility and prepare your application.
Plan your EOFY appeal around the $2 rule
The Australian financial year runs from 1 July to 30 June. EOFY (End of Financial Year) is the biggest giving moment in the Australian charity calendar, because donors are motivated to maximise their tax-deductible contributions before the year closes. The June period is when your DGR status is most commercially significant.
To put the scale in context: donations and bequests to Australian charities totalled approximately $13.9 billion in the year to 30 June 2023, according to the ACNC Australian Charities Report. (Re-verify the exact figure against the most recent report before publishing, as this is updated annually.)
A few practical steps for your EOFY appeal:
- Start early. Send your EOFY appeal in early-to-mid June, not in the final days. Donors making end-of-June gifts need time to process the payment and you need time to issue receipts before 30 June.
- Remind donors of the $2 rule plainly. "Your donation of $2 or more is tax-deductible" is clear, accurate, and actionable. Many donors do not know the threshold.
- Issue receipts promptly. Donors lodging their tax returns in July will be looking for their EOFY receipts. Aim to issue within seven business days of the donation, or sooner during the EOFY rush.
- Check your ABN Lookup record is current before your appeal goes out. Nothing undermines an EOFY appeal faster than a donor who cannot verify your DGR status.
- Consolidate your receipting. If donors have given multiple times across the financial year, a consolidated annual tax receipt (covering all gifts from 1 July to 30 June) is a courtesy that many regular givers appreciate.
Our EOFY fundraising guide for Australian charities covers the full appeal strategy, from timing your communications to setting donation targets. This article focuses on the DGR mechanics that make it work.
Frequently asked questions
What is the difference between ACNC registration and DGR endorsement?
ACNC registration means your organisation is listed as a charity on the Australian Charities and Not-for-profits Commission's Charity Register. DGR endorsement is a separate ATO decision that lets your donors claim a tax deduction on gifts of $2 or more. You can be ACNC-registered without being DGR-endorsed. The ACNC and the ATO are two different bodies doing two different jobs. Only the ATO's DGR endorsement makes donations tax-deductible.
How do I know if my organisation is DGR-endorsed?
Search for your organisation on ABN Lookup. Your ABN record will show a DGR field if you hold endorsement, including the DGR category and the date from which endorsement applies. If the field is absent, your organisation does not currently hold DGR status.
What must a tax-deductible receipt include in Australia?
Your receipt must include your organisation's full name, your Australian Business Number (ABN), a statement confirming DGR status (for example: "Donations of $2 or more are tax-deductible"), the donation amount, and the date of the donation. All five elements are needed for the donor to support their deduction claim with the ATO.
Are raffle tickets tax-deductible?
No. Raffle tickets are a purchase, not a gift. The buyer receives something of value (a chance to win), so the ATO treats the payment as consideration, not a deductible donation. This applies regardless of your DGR status and regardless of whether the raffle is run by a charity.
Our sports club cannot get DGR endorsement. What can we do?
Most sports clubs cannot obtain DGR endorsement directly because sport is not a standalone DGR category. The Australian Sports Foundation (ASF) is the standard pathway for sports clubs that want to offer tax-deductible receipts. When your club fundraises through ASF, donor gifts go to the DGR-endorsed ASF entity, which issues the tax-deductible receipt. Check ASF's website for current eligibility requirements and fees.
Is volunteer time tax-deductible?
No. The ATO does not permit deductions for the value of time or services provided to a charity. Only cash gifts and certain property gifts qualify. A volunteer cannot claim a deduction for the hours they donate, and you should not imply otherwise in any communications.
Can we still ask for donations if we are not DGR-endorsed?
Yes. Many Australian not-for-profits and community organisations raise funds without DGR endorsement. Your donors simply cannot claim a tax deduction for those gifts. Be transparent about this with your supporters. Some donors give regardless of deductibility; others will specifically seek out DGR-endorsed organisations, especially for larger EOFY gifts.
What are the 52 DGR categories?
The 52 DGR categories are set out in Division 30 of the Income Tax Assessment Act 1997 and cover areas including health, education, welfare, environment, cultural institutions, disaster relief, and sport (via ASF). The ATO's DGR categories table is the authoritative and complete list. Check it against your organisation's charitable purpose before applying.
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