Following up on the Federal government’s election promise to provide a roadmap to double philanthropy by 2030, the Treasurer has given the Productivity Commission a reference to undertake an inquiry into philanthropy.
It is proposed to identify and assess opportunities and obstacles to increasing philanthropic giving and volunteering to provide a roadmap to achieving this objective which was discussed in our March 2023 bulletin.
Initial submissions had a closure of 5 May 2023, but many are still being posted on the Productivity Commission Submission web site with over 250 so far. This is more than the 2010 Productivity Commission (179 initial submissions), but less than the 1995 Industry Commission’s nearly 700 submissions.
However, about 80 submissions appeared to follow a template from young passionate individuals raising almost similar issues, usually concerned with animal welfare or the prevention of nuclear war. They urged expanding deductible gift recipient (DGR) status to realign its status with contemporary Australian values, and that would include DGR status for campaigning animal rights organisations and the prevention of nuclear war. They further urged that policy advocacy is a valid charitable cause.
The most common theme amongst the other submissions is dissatisfaction with the narrowness and administration of the DGR classification regime and various aspects of the ACNC’s definition and administration of public benevolent institutions (PBIs).
The ACNC, in its submission, also deals with the issues. Firstly it notes that applications for charity registration are increasing, with 540 registration applications being received in March 2023, its highest number in a single month since its establishment, many probably for PBI status.
The ACNC gives an example of a charity involved in environmental concerns. It applies to be registered with the PBI sub-type because the benefits associated with this sub-type would allow it to apply for grants from ancillary funds, obtain preferential tax options to attract employees and seek donations from the public. The ACNC indicates that it cannot be eligible to be registered with the PBI sub-type because a significant proportion of its activities benefit the wider community. A PBI must be organised, conducted or promoted for benevolent relief, rather than organised, conducted or promoted for the benefit of the general community or for environmental purposes.
Some of the other sub-themes that are apparent are a fear that tax concessions, particularly FBT concessions, may be rolled back; the need for charities to show how they achieve impact, but tempered with the imposition of more paperwork and costs in demonstrating impact, efficiency or effectiveness; power of collaborative giving and payroll giving; paperwork and costs of child safety checks across multiple jurisdictions; an extension of charity status to amateur sport and volunteering organisations; tax valuation of share gifts; funders paying what it takes; and gifts from personal superannuation. Some brave souls even ventured to suggest that wealth (death) taxes with a deduction for philanthropic gifts would boost giving as it has in other OECD jurisdictions.
The Commission is also collecting brief comments from the public, and about 70 have been received and published so far. Again support for the animal focussed organisations and their DGR concerns are a significant proportion of the brief comments.
The next step will be for a draft report at the end of November 2023 followed by final submissions.