What’s Happening?
The Albanese Government has introduced landmark reforms to strengthen Australia’s philanthropic sector by providing community foundations with a new pathway to deductible gift recipient (DGR) status. The Taxation Administration (Community Charity) Guidelines 2025 establish a clearer tax and regulatory framework, making it easier for community-based charities to attract donations and support local initiatives.
Why It Matters?
Community foundations play a crucial role in funding grassroots projects, strengthening social cohesion, and fostering long-term, place-based change. These reforms remove longstanding barriers that have limited their ability to receive funding from private ancillary funds and support community groups that lack DGR status.
Ben Rodgers, Chair of Community Foundations Australia, stated:
“The implementation of this reform brings more than 20 years of sector-wide advocacy to a successful close, creating a new and better tax and regulatory framework for community foundations, in recognition of the vital role they play building thriving communities across Australia.”
Maree Sidey, Chair of Philanthropy Australia, also welcomed the changes, saying:
“It’s vital that our policy and regulatory environment empowers people to give … these reforms remove big roadblocks, helping unlock the flow of more resources to important community initiatives.”
Local Impact
Community foundations exist in regions across Australia, including Mackay Bass Coast, Geelong, Alice Springs, the Eyre Peninsula, Albany, and Fremantle. They fund initiatives such as:
- Education programs
- Mental health services
- Social inclusion efforts
- Environmental sustainability projects
- Disaster recovery initiatives
By making donations to these foundations tax-deductible, the reforms are expected to significantly boost local giving and philanthropic engagement.
By the Numbers
- The Australian Government has set a target of doubling philanthropic giving by 2030.
- These reforms address a key limitation that previously restricted community foundations from receiving funds from private ancillary funds.
- The changes mark the culmination of more than two decades of advocacy from the charitable sector.
Zoom In
Before these reforms, many community foundations struggled to attract significant funding due to restrictive tax rules. Without DGR status, their ability to support smaller, non-DGR community groups was limited. This policy shift corrects that, ensuring more charitable funds can flow directly into communities that need them.
Zoom Out
The Albanese Government has taken broader steps to strengthen the charity sector, including:
- Streamlining the DGR application process for environmental organisations, cultural groups, and overseas aid charities.
- Enhancing transparency by granting the Australian Charities and Not-for-profits Commission (ACNC) more discretion to comment on compliance breaches.
- Appointing Sue Woodward, a respected charity sector expert, as ACNC Commissioner.
- Expanding representation on the ACNC Advisory Board, including voices from First Nations, culturally diverse communities, and youth advocates.
- Supporting charitable advocacy and aligning fundraising regulations across states and territories.
Dr Andrew Leigh, Assistant Minister for Charities, reinforced the government’s commitment to philanthropy:
“These reforms will make it easier for people to support charitable foundations in their local area.”
“The Australian Government has set a target of doubling philanthropic giving by 2030, and this announcement is an important step towards that goal.”
“By reducing the paperwork burden and expanding eligibility for tax-deductible donations, the Albanese Government is ensuring that more money flows to charities that are making a real difference in people’s lives.”
What to Look for Next?
With the new guidelines now in place, community foundations are expected to see an increase in philanthropic donations. The success of these reforms will likely be measured by:
- The number of community foundations gaining DGR status.
- Growth in funding for grassroots initiatives across Australia.
- Further government efforts to streamline and enhance the charity sector.
The Albanese Government continues to work alongside the philanthropic sector to build a stronger, more generous Australia—one local foundation at a time.
