Donations & Your Business: What Can You Claim?

anytimeassist
Apr 13
3 min read

When it comes to donations made through your business, it’s important to understand that not all contributions are tax deductible. The Australian Taxation Office (ATO) has strict criteria that must be met before a deduction can be claimed.

When a Donation is Deductible

To claim a deduction for a gift or donation, all of the following conditions must be met:

The donation must be made to an organisation with Deductible Gift Recipient (DGR) status
It must be a genuine gift or donation (given voluntarily with no material benefit received)
It must be money or property (including financial assets such as shares)
It must comply with any relevant gift conditions set out in tax law
You must also have a record of the donation, such as a receipt.

What is a DGR?

A Deductible Gift Recipient (DGR) is an organisation or fund that is endorsed to receive tax deductible gifts or donations.

Not all charities are DGRs. This is particularly important when it comes to:

Crowdfunding campaigns
Social media fundraisers

Many of these are not run by DGR-endorsed organisations, meaning donations made to them are not deductible.

You should always check an organisation’s DGR status before claiming a deduction.

What Your Business Can Claim

If all conditions are met, your business may be able to claim:

Gifts of money – must be $2 or more
Gifts of property or shares – different rules apply depending on type and value
Donations with token items – such as lapel pins, wristbands or stickers (these are considered to have no material value)

In some cases, special rules apply to donations made under heritage and cultural programs.

You claim the deduction in the income year the gift is made. In certain circumstances, the deduction can be spread over up to 5 income years.

Contributions vs Donations

If your business receives a material benefit in return, the payment is not considered a gift—it is treated as a contribution.

For example:

Purchasing a ticket to a fundraising dinner
Receiving goods or services in return

In these cases, different rules apply and the amount may not be fully deductible.

What Your Business Cannot Claim

You cannot claim a deduction for donations that provide a personal or material benefit. This includes:

Raffle or art union tickets
Items with an advertised price (e.g. chocolates, mugs, keyrings, toys)
Tickets to fundraising dinners or events
Club membership fees
Payments made in return for a benefit or advantage
Donations to family or friends
Donations made through crowdfunding platforms that are not DGRs
Donations made under salary sacrifice arrangements
Donations made through a will

Third-Party Donations

Sometimes a third party collects donations on behalf of a DGR (for example, a business collecting donations at the register).

You can still claim a deduction if:

The donation meets all standard conditions
You have a receipt from the third party

Bucket Donations

If your business makes small cash donations to bucket collections (for example, disaster relief appeals):

You can claim up to $10 total per income year without receipts
Each individual donation must be $2 or more
Amounts over $10 require a receipt

Record Keeping Requirements

To claim a deduction, you must keep appropriate records.

This may include:

Receipts
Bank statements
Written confirmation from the organisation

If a receipt is issued, it should include:

The name of the organisation
The ABN (if applicable)
A statement that the payment is a gift

If you do not have a receipt, you may still be able to claim using other records, such as bank statements.

More Information

Visit ATO Webpage

Download ATO Factsheet

For a donation to be deductible, it must be a genuine gift made to a DGR, with no material benefit received. Many payments that feel like donations are not deductible because they involve an exchange of value.

Understanding these rules ensures your business claims correctly and avoids issues at tax time.

Disclaimer: This is general information only and does not constitute financial or tax advice. Always seek advice specific to your business circumstances.

If you’d like help reviewing your donations, contact Jess at Anytime Assist for personalised bookkeeping support.

Contact Jess