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Historic DGR reform for community foundations

CFAustralia Update
Gerlinde Scholz | March 30th 2022

Community foundations – and the community based organisations they support – have had a win in last night’s Federal Budget, with the announcement that a special listing process will provide access to DGR1 (Deductible Gift Recipient) status for these foundations. The measure has bi-partisan support. Timing and implementation will be determined by the new government after the federal election.

The changes apply only to foundations that are affiliated with the peak body Community Foundations Australia, and follow months of consultation by Community Foundations Australia and Philanthropy Australia with Treasury officials, local MPs, and the office of Assistant Treasurer Michael Sukkar.

Community Foundations Australia Chair, Ben Rodgers, said the initiative was enabling reform at its best.

He paid tribute to those in the sector who had patiently and persistently made the case for reform over many years on behalf of the communities they live in and give to, and thanked Philanthropy Australia for being a strong partner in the advocacy effort.

Once the reform is implemented, funders and donors will be able to support local communities via community foundations from Private Ancillary Funds (PAF), strengthening a pathway  that’s especially important in the wake of natural disasters and localised crises focused on regional areas where four out of five Australian Community Foundations operate.

In NSW, the Northern Rivers Community Foundation (NRCF) knows the change in DGR status will be welcomed by local supporters who structure their giving through a PAF, and by the community based organisations on the frontline of crisis response, including many that rely on funding from their local community foundation.

NRCF Chief Executive Emily Berry said their local communities were living through an extended period of back-to-back emergencies from drought to Black Summer fires, floods, COVID19, and now repeated flooding events.

“There are many generous people here who want to contribute to disaster response and resilience-building. Potential supporters have been frustrated by the current rules that don’t allow gifts from a PAF to a community foundation. Our community based charities need their support and we will now be able to make that happen so much more easily,” she said.

The Foundation for Rural & Regional Renewal (FRRR), which has partnered with rural community foundations to facilitate access to DGR1 donations and unlock millions for locally-led change, has welcomed the reform. FRRR’s CEO, Natalie Egleton said, “FRRR celebrates this outcome and the potential this presents for growing giving to rural communities. We look forward to continuing to partner with rural community foundations, and helping to seed and support future growth and innovation, as allies and partners to the sector.”

There are 40 community foundations across Australia that enable local giving for local causes.  This significant regulatory change will help strengthen those communities with community foundations continuing to connect donors with the charitable organisations that are making a difference.

The announcement has also been welcomed by Philanthropy Australia and ProBono in their budget coverage.

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