There are countless organisations throughout Australia undertaking work for the care and protection of animals. For those wishing to pursue deductible gift recipient (DGR) endorsement, the category of ‘animal welfare charity’ may be worthy of consideration. We explore this DGR category and address some frequently asked questions.
What is an animal welfare charity?
Not all organisations focused on the care and protection of animals will be eligible for DGR endorsement as an animal welfare charity. To be endorsed an organisation must be:
- registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC); and
- an institution whose principal activity is one or both of the following:
- 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,
- (Eligible Activities).
If one or both of the Eligible Activities are the charity’s sole activity, it will fulfil the required criteria to be recognised as an animal welfare charity in alignment with the standards established by the Australian Taxation Office (ATO). Alternatively, at least one of the Eligible Activities must outweigh all further secondary activities conducted by the charity.
To determine whether the Eligible Activities undertaken by the charity constitute its principal activity, the ATO will take into account various factors including the involvement of staff and volunteers, the numbers and types of services provided, expenditure, and the use of facilities and resources.
What type of activities constitute potentially Eligible Activities?
Many different activities may constitute short-term direct care of animals. These may include:
- the provision of veterinary services to address injured or ill animals;
- assistance relating to the recovery, first aid and transportation of injured animals;
- removing fleas and ticks through washing and grooming lost animals; or
- feeding and sheltering animals while contacting their owners or while new homes are sought.
The provision of ongoing care for animals not recovering from injury and sickness and not in need of rehabilitation will not constitute short-term direct care.
Providing rehabilitation to orphaned, sick or injured animals varies considerably with the needs of the animal, but may include:
- training orphaned animals to interact in a safe manner with humans;
- the provision of care to return animals to health; and
- training injured animals to restore basic functions such as walking and eating.
Notably, animals who have received initial short term direct care may also receive rehabilitation services.
Activities which do not generally satisfy the rehabilitation requirements include:
- providing care to animals following their rehabilitation;
- lobbying or conducting activities with an educational purpose to the public;
- breeding animals;
- training veterinarians, veterinary nurses or animal carers; and
- activities typically undertaken by organisations such as animal sanctuaries, nature reserves and zoos.
Overall, it will be important for an organisation considering DGR endorsement under this category to carefully assess its activities against the requirements for Eligible Activities, as the ATO will consider each case individually.
How does an organisation become a registered animal welfare charity?
The vast majority of DGR categories, including animal welfare charities, require an organisation to be registered as a charity with the ACNC before applying to the ATO for DGR endorsement.
Once an organisation has its application for charity registration approved, it must separately apply to the ATO for registration as an animal welfare charity. This will include completing an animal welfare charity specific schedule as part of the application.
What tax concessions are available for animal welfare charities?
Charities registered as an animal welfare charity are generally eligible to access the following Commonwealth tax concessions:
- income tax exemption;
- goods and services tax (GST) concessions;
- fringe benefit tax (FBT) rebate; and
- DGR endorsement.
The first three of these Commonwealth tax concessions are linked to registration as a charity. Charity registration alone will not bring eligibility for DGR endorsement. Instead, the entity must also satisfy the requirements for a relevant DGR category – in this case an animal welfare charity.
How is the DGR category of animal welfare charity different from the ACNC subtype of ‘preventing or relieving the suffering of animals’?
Statistics provided by the ATO indicate, in line with data from 2020-2021, there were 600 entities endorsed under the DGR category of animal welfare charity. As a comparison, current data from the ACNC Register indicates there are over 1,100 currently registered charities with a subtype of ‘preventing or relieving the suffering of animals’ (noting this figure includes charities that have more than one subtype).
The charity subtype of ‘preventing or relieving the suffering of animals’ is not defined in the Charities Act 2013 (Cth) but may include:
- promoting benevolence and preventing or suppressing cruelty to animals;
- providing animal sanctuaries;
- providing veterinary care and treatment; and
- caring for, and re-homing, animals that are abandoned mistreated or lost.
Overall, the scope of the purpose and activities that may fall within this subtype are broader than the requirements that must be satisfied for endorsement as a DGR under the category of animal welfare charity. This means charity registration under the animal subtype does not guarantee successful endorsement as an animal welfare charity.
How can we help?
If you believe your organisation may be eligible for DGR endorsement as an animal welfare charity or want to find out about DGR endorsement more broadly, please get in touch with our specialist Charities + Social Sector lawyers.