Environmental organisations

Overview

Environmental organisations are those that either:

• protect and enhance the natural environment or of a significant aspect of the natural environment
• provide information or education, or carry-on research, about the natural environment or a significant aspect of the natural environment.

Environmental organisations include those involved in land, wildlife and rainforest conservation.

Changes to the Register of Environmental Organisations

Prior to 1 January 2024, environmental organisations and their public funds had to be registered on the Register of Environmental Organisations, which was administered by the Department of Climate Change, Energy, the Environment and Water to have their public fund endorsed as a deductible gift recipient (DGR).

From 1 January 2024, we administer the DGR category for environmental organisations (item number 6.1.1) and assess eligibility for endorsement.

If you were endorsed as a public fund on the Register of Environmental Organisations prior to 1 January 2024, transitional provisions apply.

Eligibility criteria

To be eligible for DGR endorsement as an environmental organisation the entity must:

• have an active Australian business number (ABN)
• have the characteristics of an environmental organisation:
  • be an institution that is registered with the Australian Charities and Not-for-profits Commission (ACNC) as a charity or be an Australian government agency
  • have a principal purpose that is one of the following:
    • the protection and enhancement of the natural environment or of a significant aspect of the natural environment, or
    • the provision of information or education, or the carrying on of research, about the natural environment or a significant aspect of the natural environment
  • have a policy of not acting as a mere conduit for the donation of money or property to other organisations, bodies or persons
  • maintain a gift fund with an appropriate DGR winding up and revocation clause
• be located in Australia.

Characteristics

To be eligible for DGR endorsement as an environmental organisation the entity must have the characteristics of an environmental organisation.

Institution

An environmental organisation that is registered with the ACNC as a charity must also be an institution.

An institution is an organisation established to promote a defined purpose, especially one of public or general utility. An institution carries out activities that translates its purpose into a living and active principle, and can take the legal form of a trust, company or incorporated or unincorporated association. An institution is identified by its activities, size, permanence and recognition.

An institution is not:

• a fund – for example, a trust merely to manage or hold trust property to make distributions to other entities or people
• a structure with a small and exclusive membership that is controlled and operated by family members and friends and carries out limited activities.

Principal purpose

A principal purpose is the main or dominant purpose for which the organisation exists. An environmental organisation can have other purposes which are incidental, ancillary, or secondary to its principal purpose.

An environmental organisation’s principal purpose must be one of the following:

• the protection and enhancement of the natural environment or of a significant aspect of the natural environment; or
• the provision of information or education, or the carrying on of research, about the natural environment or a significant aspect of the natural environment.

We take a holistic approach in determining the substance and reality of the organisation's purpose. The objects in the organisation's constituent or governing document, and the activities by which those objects are achieved, are the main factors considered when determining the purpose of the organisation. Other relevant factors can include:

• other elements in the constituent documents of the institution such as its powers, rules, not for profit and winding up clauses, and clauses governing who can benefit from the institution's activities and in what ways
• how the institution is operated
• any legislation governing its operation
• the circumstances in which it was formed
• its history
• its control.

Natural environment

The activities underlying an environmental organisation's principal purpose must relate to the natural environment as distinct from other types of environments such as built, cultural and historic environments. Natural environment includes all aspects of the natural surroundings of humans, whether affecting them as individuals or in social groupings.

The natural environment and concern for it can include:

• significant natural areas such as rainforests
• wildlife and their habitats
• issues affecting the environment such as air and water quality, waste minimisation, soil conservation, and biodiversity
• promotion of ecologically sustainable development principles.

The natural environment excludes:

• constructions such as the retaining walls of dams
• cultivated parks and gardens
• zoos and wildlife parks (except those principally carried on for the purposes of species preservation)
• cultural sites
• heritage properties.

Organisations that assist both native and non-native animals will not qualify as environmental organisations. However, those organisations may qualify for DGR endorsement under item 4.1.6 - animal welfare charity.

Policy to not act as a mere conduit

An environmental organisation must have a policy of not acting as a mere conduit for the donation of money or property to other organisations, bodies or persons.

An organisation must not:

• be directed by a donor to act as a conduit by passing a donation of money or property to other organisations, bodies or persons
• act as a collection agency for tax-deductible donations intended by a donor to be passed on to another organisation, body or person.

The policy to not act as a mere conduit may be expressed and communicated in several ways, including in an organisation’s constituent or governing document, in a separate policy document, stated on the organisation's website or stated on a receipt issued to a donor.

Gift fund

Environmental organisations must maintain a gift fund, and gifts must be received by the organisation’s gift fund. An environmental organisation must use its gift fund for its principal purpose only.

The following gift fund requirements must be met:

• it is a fund
• it is maintained and used only for the principal purpose of the organisation
• all gifts and deductible contributions of money or property for that purpose are made to it
• any money received by the organisation, because of such gifts or deductible contributions is credited to it
• it does not receive any other money or property.

The gift fund should be set up as part of your organisation. The gift fund may have its own rules or constitution, or they may be part of the governing documents of your organisation.

The rules or governing documents should provide evidence of the gift fund's existence, name, purpose and operations.

Most organisations must be required by a law, its constituent documents or governing rules – to transfer any surplus assets of the gift fund to another gift deductible fund, authority or institution when the organisation is wound up or the DGR endorsement is revoked, whichever occurs first (DGR winding up and revocation requirement). This requirement can be met by including a DGR winding up and revocation clause in the rules of the gift fund.

If the organisation is a registered charity, the clause must state that the surplus assets of the gift fund shall be transferred to a charity with a similar charitable purpose to which income tax-deductible gifts can be made to.

Organisations do not need to meet the DGR winding up and revocation requirement if they are established by an Act of the Commonwealth Parliament, and that Act, or another Act, does not provide for the winding up or termination of the entity. A gift fund is still required.

Applying to be DGR endorsed

There are 2 ways to apply to be registered as a DGR under Item 6.1.1 -Environmental organisation:

• If you are currently applying for registration as a charity with the Australian Charities and Not-for-profits Commission (ACNC), you can apply to us for DGR endorsement on the ACNC's registration application form – the ACNC will send your DGR application to us once your charity is registered.
• If you have an ABN, and you're either already registered as a charity or are an Australian government agency, you can complete our Application for endorsement as a deductible gift recipient form.

In your application, you will have to include:

• a completed Environmental organisation schedule for deductible gift recipient applicants
• evidence documents (if applicable)
• a copy of your constituent or governing documents in either a Word or PDF file format. Image files may cause issues and may delay your application.

After you apply

What you can expect when we process your DGR application:

• we will contact you to confirm we have received your application, and if we require further information
• while your application is being processed, donations you receive are not tax deductible
• after receiving all required information, it may take up to 28 days for us to process your application
• you will receive a notification of your application outcome in the mail.

Once you are DGR endorsed:

• your DGR status will be added to the ABN lookupExternal Link on the Australian Business Register so donors can confirm your environmental organisation can receive tax-deductible gifts
• you can update your website or material advising of your tax-deductible status.

Responsibilities as a DGR endorsed environmental organisation

It is important to make sure you are meeting your responsibilities as a DGR endorsed environmental organisation.

You must keep records that explain all transactions and activities relevant to your organisation's status as a DGR.

Your records must show that you have used all your gifts and deductible contributions for your principal purpose.

Receipts for donations must be issued in the name of the organisation not the gift fund.

You should consider whether you need to be registered for goods and services tax (GST), fringe benefits tax (FBT) or PAYG withholding.

If your organisation is registered with the ACNC you must keep records, report each year to the ACNC via the Annual information statementExternal Link and tell us if your charity’s details change.

We recommend you conduct a review of your organisation's eligibility for DGR status each year or when there is a substantial change in your activities. You can use our worksheet to review your DGR status.

You must tell us in writing if your organisation is no longer entitled to DGR endorsement. You must do this before, or as soon as possible after, the entitlement ends.

Tax-deductible gifts and donations

Once you are DGR endorsed, people who donate to your environmental organisation can seek a tax deduction. Donations can be either money or property.

There are some requirements that donations need to meet to be tax deductible.

The donation must be a gift, not a contribution:

• A gift is where a donor does not receive a material benefit in return (for example, a donor puts $5 in a collection box).
• A contribution is where a donor receives a material benefit in return (for example, membership fees or purchasing a ticket to a fundraising dinner).

If you provide the donor with a small token of appreciation for their donation – such as a sticker, or a mention in a newsletter – the donation can still be considered a gift. However, if your acknowledgment is larger and the donor can use or benefit from it, this may prevent the donation being considered a gift.

It is the responsibility of the donor to determine whether the donation is a tax-deductible gift.

The types of donations that can be tax deductible gifts include:

• money of $2 or more
• property, that is purchased during the 12 months before making the gift, or that we value at more than $5,000
• trading stock.