Making Donations in a Tax Effective Way


As you look forward to a new year, you may wish to review your charitable giving and how tax effective your philanthropy is.

Not all charitable donations are tax deductible. Registered deductible gift recipients (DGRs) provide you with a receipt stating that the gifts are deductible. The Australian Charities and Not-for-profits Commission (ACNC) has a website ( that can provide you with information on your charity.

It’s important to know thatnot all charitable donations are tax deductible.

Some strategies for making tax effective donations are:

  • If you have a spouse, the person with the higher taxable income should make the donation, in order to claim the higher deduction.
  • If you make a large one-off donation, you can spread the claim for deduction over five years in varying amounts, so that your claim will be at your highest marginal rate for each year.
  • If you have a trust, you can distribute income to your charity, before distributing to yourself or other beneficiaries who will be taxed. This way you giving comes from before-tax income rather than from after-tax income.
  • If you have say $500,000 or more as a lump sum for philanthropy (for example, from the sale of a property) you may consider establishing a private ancillary fund or foundation. This has two benefits: firstly, it gives you an immediate tax deduction; then secondly, you establish a philanthropic legacy in your family that can last generations. Some established families with ‘’old money’’ wealth like the Myer family have foundations which continue their philanthropic vision for many years. Be aware though that there are some complexities and compliance hoops to jump through if you want to establish a foundation.

Feel free to contact us if you wish to discuss tax effective giving.


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