Fund timeframes
Due to the nature of disaster relief, ADRFs can only receive tax deductible donations for a two year period. The donation must be made within two years from either the day:
- the event occurred if specified in the declaration
- of the declaration.
This does not stop you from providing assistance and relief after the two years. There is no specific period by which donated funds should be spent, provided the funds continue to be applied to relieve people in distress as a result of the disaster for which the fund was endorsed.
Winding Up
ADRFs generally continue to operate to the extent that funds remain and they meet their purpose.
Before winding up your fund, you should consider if you can use residual funds to relieve any remaining distress.
ADRFs that are unable to further distribute surplus funds are required to wind up in accordance with their governing rules which will include transferring assets to an appropriate DGR.
Winding up clause
Example of an acceptable winding up clause for an ADRF is:
In the event of the fund being wound up, any surplus assets remaining after the payment of the fund's liabilities shall be transferred to another deductible gift recipient that is an ADRF established for the relief of people resulting from (insert relevant disaster) or, if such a fund does not exist, a fund or organisation with similar objects, to which income tax deductible gifts can be made.
End of exampleThe winding up clause can be tailored with alternative words but must prevent any surplus assets being directed to:
- the administrators of the fund or their associates
- non-charitable purposes.
See also
- Can you be endorsed as a DGR?
- Helping in a disaster
- Australian disaster relief funds and tax deductible gifts