A useful vocabulary for working in fundraising and development in Australia.

The practice of providing donations to an organisation on an annual basis to support the organisation’s principal purpose.

The ATO is the Australian Government’s principal revenue collecting agency.

A donation of money or an asset upon the owner’s death as specified in the owner’s will.

An organised drive to collect and accumulate substantial funds within a given period to finance major needs of an organisation, such as a building, major repairs project or acquisition of artworks. Sometimes it can indicate a campaign to raise funds for an endowment, to provide for the future needs of the organisation.

The formal expression or statement that describes the work an individual or organisation carries out or creates and why it should be supported. The case for support should be powerful, succinct and should clearly describe the difference the work or the organisation makes.

A charity is an institution or fund established for a charitable purpose—which encompasses some not-for-profit arts and cultural organisations.

Refers to in-kind support provided by a sponsor or partner such as goods (e.g. flights) or services (e.g. marketing).

A corporate foundation receives its income from the profit-making company whose name it may bear, but is established as a separate legal entity, usually with a permanent endowment. They often receive staff contributions and/or contributions from company profits on a regular basis.

Crowdfunding is a financing method that involves soliciting relatively modest contributions from a large number of people for a defined cause or project in exchange for specific rewards. Crowdfunding makes use of the easy accessibility of contacting potential contributors through the internet, including social media websites.

A program of government that encourages Australians to donate items of cultural significance from private collections to public art galleries, museums, libraries and archives through the provision of specified tax incentives.

If a not-for-profit (NFP) organisation wants to receive income tax deductible gifts and tax deductible contributions, it must be a deductible gift recipient (DGR). The majority of organisations become DGRs by being endorsed by the ATO. The only DGRs that do not need to be endorsed are those listed by name in the tax law.

An unconditional voluntary transfer of money, property, assets or services to an organisation or individual where the donor doesn’t receive any benefit, as a condition of the gift.

A person or organisation that gives money, property, assets or services to a not-for-profit organisation and receives no material benefit on condition of the gift.

A capital fund established to provide income for grantmaking purposes. The fund is usually invested ‘in perpetuity’ meaning there is no time limit for its end and only the income is distributed, not the capital amount.

According to Philanthropy Australia, a family foundation is a descriptive term used to refer to private foundations that have been established by a family. They are either run by family members or managed by members of the original donor’s family with, in most cases, second or third generation descendants serving as trustees or directors on a voluntary basis.

In philanthropic terms, a foundation (also a ‘charitable foundation’ or ‘trust’) is a legally established not-for-profit entity that typically donates funds or makes grants to other organisations. It may also refer to a fund which exists to provide ongoing support to an organisation’s own charitable purposes.

FBT is a tax payable by employers who provide fringe, or non-cash benefits to their employees. An example of a fringe benefit on which FBT may be payable is when an employer allows an employee to use a work car for private purposes.

Fundraising is the act of soliciting donations from the public for general or specific purposes. State and Territory Governments have legislation governing fundraising, often as consumer protection and it may be necessary to obtain a permit from government authorities to conduct fundraising in the specific State/Territory.

A gift is the term used in tax law to refer to a sum of money or an asset (property or goods) voluntarily transferred to an individual or organisation for its use and benefit. To receive a tax deduction for the gift, the provider cannot expect any tangible benefit in return, and the organisation must be endorsed as a deductible gift recipient (DGR).

If you have DGR status and are receiving donations you must set up a separate bank account in which to hold those funds separately from your other funds/income. The gift account requirement helps ensure that DGRs use gifts for their principal purpose only, and is required by law.

GST is a broad-based tax of 10 percent on the supply of most goods and services consumed in Australia, where the supply is a taxable supply, and the importation of most goods into Australia.

A payment of financial assistance from one organisation (usually a government entity or a grant making foundation) to another by means of direct contributions, subsidies, co-payments or similar.

A donation of goods or services, time or expertise, rather than cash or property.

Major gifts are those gifts that are large relative to the majority of the gifts the organisation receives. The definition of a major gift thus varies from one organisation to another, for some it may mean a gift of $10,000, for others a gift of $10 million.

A grant or gift made with the specification that the amount donated must be matched one a one-to-one basis or some other prescribed formula.

Microfinance is the provision of financial services to low-income clients or other groups and organisations, who traditionally lack access to banking and related services.

A not-for-profit organisation is an organisation whose primary objective is something other than the generation of profit, and which does not distribute any profit to the organisation’s members. A not-for-profit organisation may have a ‘profit’—or surplus—left over after operating costs, but whereas a for-profit business would distribute that profit to its owners, shareholders or members, a not-for-profit must use the surplus to further the purpose of the organisation and its activities.

A reciprocal and ongoing commercial relationship between two parties (such as a not-for-profit and a business) that involves the exchange of benefits.

According to Philanthropy Australia, philanthropy is ‘the planned and structured giving of money, time, information, goods and services, voice and influence to improve the wellbeing of humanity and the community’.

Trusts and foundations are legal entities established by individuals or institutions for the collection and accumulation of funds for use for philanthropic purposes. Most distribute grants to support causes in line with the wishes of the founder and/or the goals of the trust or foundation.

A private ancillary fund (PAF) is a legal structure which is often used by families, individuals or companies to establish grantmaking foundations. A PAF must only make grants and is not permitted to carry out charitable programs. A PAF and cannot receive donations from others or the public.

A private foundation refers to a non-governmental, not-for-profit organisation established by an individual or group of individuals, which is governed by a trustee or board of trustees and which makes grants for the public benefit. Generally a private foundation will have a corpus of funds which is invested, and the income is given out in the form of grants.

Pro bono generally refers to the provision of professional services voluntarily and free of charge. It is most commonly used in professional services such as legal, accounting, auditing, marketing, advertising, etc.

An individual, business or foundation identified as a potential donor.

A public ancillary fund (PuAF) is a type of ancillary fund which is entitled to endorsement as a deductible gift recipient (DGR). A PuAF collects tax deductible donations from the public which it distributes to DGRs covered by item 1 of the table in subsection 30-15 of the Income Tax Assessment Act 1997. A PuAF has the following characteristics:

  • It exists only to collect, hold and distribute gifts to item 1 DGRs and must not carry on other activities
  • The public is invited to contribute the fund
  • The public participates in the governance of the fund (usually through the majority of trustees being representatives of the public)
  • It cannot make gifts to other ancillary funds.

A public fund is a tax deductible fund with three main characteristics:

  • It is the intention of the founders that the public will contribute to the fund;
  • The public, or a significant part of it, does in fact contribute to the fund;
  • The public participates in the administration of the fund. For non-government public funds, this means that the fund must be administered or controlled by persons considered to have a degree of responsibility to the community, either because of their tenure of a public office or because of their position in the community.

The practice of providing donations to an organisation on a regular basis, usually on a monthly basis.

The Register of Cultural Organisations assists qualifying cultural bodies to attract private support by enabling donors the incentive of a tax deduction. Cultural organisations listed on ROCO have a public fund which is endorsed as a DGR and is therefore eligible to receive tax deductible donations.

Distinct from traditional grants, social investment implies a return, however distinct from traditional investment, the return is primarily social. Social investment models may range from a mainstream financial investment in which the return is primarily financial with some sort of social or environmental return to (at the other end of the scale) where the return on investment is primarily social and/or environmental with minimal financial return to the investor.

Sponsorship is a business agreement between an organisation and a business with the aim of mutual benefit—material and organisational. Sponsors can provide cash and/or in kind support in exchange for benefits such as tickets to performances, access to new audiences and markets, or naming rights. Because material benefits are exchanged for mutual benefit sponsorship is not a gift and therefore does not receive a tax deductible receipt under the DGR provisions. However, businesses can claim deductions for business expenses, and a sponsorship expenses fall into this category.

A tax concession charity is a fund or institution which has been endorsed as charitable by the Australian Taxation Office. It is important to note that not all organisations which are tax exempt are actually tax concession charities. An organisation which has been endorsed will be in possession of a certificate from the ATO which states that it has been endorsed as a tax concession charity. Being endorsed as a TCC provides an organisation with exemption from income tax and the lodgement of income tax returns as well as other concessions in relation to Fringe Benefits Tax and GST. Many philanthropic foundations and trusts require their grant recipients to be endorsed as a TCC.

A receipt that can be provided to a donor which includes the amount that can potentially be claimed back in a tax return at the end of the tax year.

A legal document in which an owner specifies how to deal with or allocate their assets after their death.

Workplace giving is a mechanism for salaried employees to make regular pre-tax donations to DGR organisations. It is also referred to as pre-tax payroll deductions or giving.