Animal welfare charities and good governance What Not-For-Profits - - PowerPoint PPT Presentation
Animal welfare charities and good governance What Not-For-Profits need to know Webinar presented by: Melinda Knight NFP Advice Team Members 4 June 2019 Overview What you need to know about animal welfare charities We will cover What
What Not-For-Profits need to know Webinar presented by: Melinda Knight NFP Advice Team Members 4 June 2019
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What you need to know about animal welfare charities
We will cover What attracts our attention? DGR endorsement What is an Animal Welfare Charity Characteristics of an animal welfare charity What you can use the funds for Record keeping Reviewing your endorsement
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Quick codes
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Generally, animal welfare charities that attract our attention are those that: don’t meet the criteria of an animal welfare charity have a committee that is made up exclusively of family members or close friends use funds for purposes other than the principal activities of an animal welfare charity provide private benefits to members, including using organisation funds to care for your own animals
We know that most animal welfare charities want to do the right thing and meet their tax
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Endorsement
In order to receive tax deductible gifts an
endorsed as a deductible gift recipient (DGR) There are two types of DGR endorsement: where an organisation as a whole falls within a DGR category where a fund, authority or institution that is operated by an
category There are many DGR categories and each have their own requirements
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Section 30-45 Income Tax Assessment Act 1997
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̵ providing short-term direct care to animals (but not only native wildlife) that have been lost or mistreated or are without owners; ̵ rehabilitating orphaned, sick or injured animals (but not only native wildlife) that have been lost or mistreated or are without owners
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This requirement is different to the ATOs ‘principal activity’ test For DGR endorsement
Animal welfare groups may be able to register with the ACNC under the ‘preventing or relieving the suffering of animals’. They may also select other recognised charitable purposes they have or charitable activities they engage in such as research or environmental programs
DGR endorsement
undertake specific types of activities to be eligible for DGR
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Whether an institution exists will depend on the circumstances. The relevant factors that we consider include an organisation’s activities, size, permanence and the way it is recognised Organisations that have a small and exclusive membership (family and close friends) and carry on limited activities will not meet the institution requirement. The characterisation of a charity as an institution is a question of fact Animal welfare charities must be operating in an institution-like manner.
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For both types of activities, care must be provided to animals that are lost, mistreated or are without owners.
Short term direct care
Examples include:
animals
new homes are found An animal welfare charity’s principal activity must be either or both of:
Rehabilitation
Examples include:
interact with humans
health If one or both of these are the sole activity, it will qualify as an animal welfare charity. If not, at least one of these activities must outweigh all other activities.
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Characteristics of an animal welfare charity
need of rehabilitation, ongoing care for them will not qualify.
does not qualify.
zoos.
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Street Smart Cats
Sylvia and her mother Julie establish a not-for-profit organisation called ‘Street Smart Cats’ to rescue and care for stray cats in the inner city. Sylvia and Julie are the only committee members and they have successfully registered with the ACNC. As well as caring for the animals in their home, they have a network of foster carers and have set up a website to find forever homes for the cats. Although Street Smart Cats meets the principal activity test, it is not eligible for DGR endorsement as it is not operating in an institution like manner. Its membership is made up of close family members only.
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Pets in Need
Pets in Need is a registered charity and their main purpose is to provide financial assistance pet
injured pets when their owners can’t afford necessary treatment. Pets in need is not eligible for endorsement as it doesn’t meet the principal activity
be lost, mistreated or without owners.
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Forever Home Finder
Forever Home Finder is an organisation that has been established to connect animal welfare charities with people looking to adopt pets. They have registered with the ACNC. Forever home finder does not have a physical location or provide direct care to animals. They have set up a website and provide a facility for the public to search for pets available for adoption from their
to the animal welfare charities for consideration. Forever Home Finder is not eligible for DGR endorsement as it doesn’t meet the principal activity requirement. They are not providing direct care or rehabilitation.
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The Grass is Greener
Maggie owns a large property and has established a charity with some folks from her community. They care for animals that have been surrendered by people that can no longer care for them. They
can be safely rehomed. Maggie has set up a Facebook page for The Grass is Greener to reach out to potential pet owners and rehomes an average of 6 pets a month. The Grass is Greener is eligible for DGR endorsement as it is operating as an institution and meets the principal activity requirement.
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Reference Subdivision 382-B of Schedule 1 of The Taxation Administration Act 1953
The Taxation Administration Act 1953 requires that DGRs keep records that explain all transactions and other acts they engage in that relate to their DGR status The records must:
the transaction to which the record relates.
into English) and show that the DGR has used its deductible gifts for school building fund purposes
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Reference Taxation ruling TR 2005/13 Income Tax: tax deductible gifts – what is a gift
For a donor to be entitled to a tax deduction for their donation, their gift must be unconditional and voluntary Volunteer carers are not able to claim a tax deduction for the costs they incur e.g. purchasing food. For a gift to be deductible for the donor it must be an allowable gift type and received by the DGR
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Examples of common expenses
Running and administration costs Veterinary bills for injured animals Reimbursing volunteers for expenses incurred on behalf
Allowable x Caring for your own pets x Any expense that is not related to your purpose or provides a private benefit to anyone associated with your
Not allowable Private benefits
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2. Review your current situation and governing documents to ensure that: ̵ you are operating as an institution ̵ you meet the principal activity requirements ̵ you are using your DGR funds for your purpose and you are not providing private benefits ̵ you are accounting for donations and expenditure appropriately 3. Talk to the ATO not-for-profit team if you have concerns about your eligibility
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getting started tax concessions getting endorsed gifts and fundraising Have a question about … Not-For-Profit information line on 1300 130 248 From 8.00am to 6.00pm, Monday to Friday Call us
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