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Case Study: 2 challenging DGR statuses for international charities

In this case study, we highlight our recent work in achieving DGR status and ACNC registration for a new international charity doing much-needed work in a range of areas.

Case Study: 2 challenging DGR statuses for international charities

In this case study, we highlight our recent work in achieving DGR status and ACNC registration for a new international charity doing much-needed work in a range of areas.

In this case study, we highlight our recent work in achieving DGR status and ACNC registration for two new international charities doing much-needed work in a range of areas.


In Need of Help Inc.

When In Need of Help Incorporated came to us seeking assistance with their charity, we helped our client understand that gaining ACNC registration and DGR status was going to be a journey.

The founders are modestly successful small businesspeople who had decided to give back by raising money in their local community to support an orphanage overseas.

Around the time they were applying for charity registration, the ACNC was toughening its stance on charities operating overseas by introducing new External Conduct Standards.

The NFP Team at Birchgrove Legal was able to work closely with the founders to amend and refocus their initial governing document (association constitution) and develop a detailed plan for the charity to comply with the ACNC’s Governance and External Conduct Standards.

In Need of Help’s organisational statement: ‘to save a soul is to save humanity’.

We encouraged the volunteer board members to develop a business plan and together we were able to develop a series of financial and operational policies to ensure that the charity Board is able to effectively verify and monitor the risks in its overseas partner operations.

In Need of Help Incorporated recently gained ACNC registration as a Public Benevolent Institution and ATO endorsement as a Deductible Gift Recipient (DGR). The funds they are able to raise through their small business connections in Western Sydney are helping to educate, accommodate and care for orphaned children in a dedicated facility in the Philippines. Their vision: ‘to save a soul is to save humanity’.

The In Need of Help team in action

ThinkYouth

Birchgrove also recently acted for ThinkYouth, helping establish the charity, complete the ACNC registration process and successfully applying for DGR status.

ThinkYouth is an organisation with an international mandate and a base in Australia. The organisation’s key areas of operation are as follows: 

Its remit is international in nature, and was part of the scope of Birchgrove Legal’s engagement in terms of establishing the charity with the relevant structures and provisions to allow it to operate internationally, while benefiting from organisational and tax advantages from being a charitable organisation.

1. Fulfilling the ACNC registration process

To be eligible for ACNC registration, an entity must:

  • be not-for-profit;
  • have charitable purposes that are for the public benefit;
  • comply with the ACNC governance standards;
  • not have a disqualifying purpose
  • not be an individual, political party or government entity.

Typically, compliance with ACNC governance standards can be time consuming and the most onerous of the above requirements. 

Birchgrove Legal worked with ThinkYouth’s founding board to ensure that all founding documents (including the constitution) were fully compliant with ACNC governance requirements.

We advised the board on several important matters in this regard, including options open to them and the best way forward in our considered opinion.

2. Achievement of DGR status

DGR status is the most sought-after aspect of charity registration. A DGR is an entity or fund that can receive tax-deductible gifts.

To be eligible for DGR status, an entity must be endorsed by the ATO on application or listed by name in the income tax law.

In order to be eligible, an entity must:

  • fall within a general DGR category under the income tax law; and
  • apply to the ATO with supporting documentation.

The timeframe from incorporation to registration as a charity to receiving DGR status can be quite lengthy depending on the precise operations and activities of the organisation in question.

Endorsement as a DGR status entity can take up to 4 to 6 weeks in more straight forward instances, and much longer in more complex or bespoke cases. 

In this instance, we successfully applied for DGR status in a slightly more complex series of circumstances given the multifarious operations of the charity. After working through several important steps in the application process, we satisfied DGR status requirements, allowing donors to receive the benefits of tax deduction on their donations. 

ThinkYouth promises to be an exciting new venture in the community, undertaking important social work and impacting people internationally. Our achievement of both ACNC registration and DGR status for the organisation reflected both the skill and dedication of our NFP team, which continues to achieve outstanding results for our clients, both at inception and in the ongoing operations of not-for-profit organisations.

 

ThinkYouth "advocates the providence of basic necessities to less fortunate locals, includes providing basic care to those in need, empowering youth through education, and engaging communities in effective dialogue"
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