Crowdfunding platforms like gofundme have become an increasingly popular method for individuals, businesses and charities to fundraise online. It generally involves the entity setting a fundraising target, then appealing to the public for donations in order to reach that target. Many taxpayers are aware that donations made to charities are tax deductible, but what most find surprising is that donations to crowdfunding platforms generally are not deductible. The reason is to do with the Australian Tax Office’s definition of what is considered to be a ‘deductible donation’.
In order for a donation to be tax deductible, it must meet the following criteria:
- The donation must be made to a deductible gift recipient
- It must truly be a gift or donation, meaning you voluntarily transfer the money without expecting to receive any material benefit at all
- The donation must be money or property
- It must comply with any relevant gift conditions (this is applicable to some deductible gift recipients)
The issue with individuals, businesses and charities on crowdfunding platforms is that commonly they are not registered as deductible gift recipients (DGR), therefore any donations to these entities are not tax deductible as per the ATO.
The best way to confirm that the charity you wish to donate to is a DGR is to check that they are listed on the ABN Lookup’s list of DGR funds & endorsed entities. This can be found by following the link below.
https://abr.business.gov.au/Tools/DgrListing
Related blogs:
ATO reminder about deductibility of donations
Is my deduction tax deductible?
Author: Tessa Roberts
Email: tessa@faj.com.au
