Charitable donations and tax deductions: How does giving money to charity reduce tax?
Every donation to Australian Cancer Research Foundation (ACRF) contributes to life-saving cancer research and donations of $2 and over are tax-deductible.
With the end of the financial year approaching, we thought we’d take the opportunity to explain how your gift to charities such as ACRF will reduce the amount of tax you need to pay.
What is a tax deductible donation?
A tax deductible gift or donation will reduce your taxable income and therefore the amount of tax you need to pay.
A donation you make to charity is only tax deductible if the organisation is an ATO endorsed deductible gift recipient (DGR). ACRF is a DGR and also has the registered charity tick from the Australian Charities and Not-for-Profits Commission (ACNC). This means that ACRF complies with the transparency and accountability standards of the ACNC Charity Register.
To claim a tax deduction for a gift or donation, it must also meet the below conditions:
- It must be made to a DGR organisation.
- It must truly be a gift or donation – that is, you are voluntarily transferring money or property without receiving, or expecting to receive, any material benefit or advantage in return. A material benefit is an item that has a monetary value such as a raffle ticket, fundraising chocolates or fundraising dinner ticket.
- The gift or donation must be of money or property. This can include financial assets such as shares.
- The gift or donation must comply with any relevant gift conditions. For some DGRs, the income tax law adds extra conditions affecting types of deductible gifts they can receive.
For full information on charity donation tax deductions, please visit the ATO website – Gifts and Donations or speak with your financial adviser or accountant.
Tax benefits: How a charitable donation can reduce your tax
When you file your tax return, it includes the total of how much you earned in a given year from everything that earned you money — everything you earned from work, selling investments and more.
This is your gross income. From this amount, you are able to deduct some things, including charitable donations, to organisations such as ours.
A reduced taxable income means that the tax you need to pay will also be reduced. This will result in a higher refund on tax paid throughout the year or a reduced ATO debt.
NB: To claim a tax deduction, you must have a record of your donation, such as a receipt.
Why should you give to charity in order to reduce your tax?
In addition to reducing your taxable income, your donation will help a charity fulfil its purpose. At ACRF, our purpose is to equip cancer researchers with the tools they need to improve the prevention, detection and treatment of all cancer types.
Giving to charity makes you feel good, every little bit counts, so you know your donation will make a difference.
Giving to charity can inspire those around you to also give, meaning more donations and an even bigger impact. It could even bring about a family-wide effort to back a cause that has special significance to you as a group.
Related reading: Does donating to cancer research help?
How tax deductible donations help fund ground-breaking cancer research
Every tax-deductible donation helps ACRF fund the technology, equipment and infrastructure Australian researchers need to continuously explore new and improved ways to prevent, detect and treat all types of cancer.
Since 1984, donations to ACRF have enabled us to award over $165 million to cancer research initiatives. Some of the most ground-breaking advancements in cancer research and treatment have been made as a result of this funding – helping each individual diagnosed with this complex and disruptive disease.
If you make a tax deductible donation to ACRF today you will:
- Help researchers learn how to interrupt the nutrition of cancer cells, leaving healthy cells unharmed.
- Help develop treatments for tumours containing more than one cancer mutation.
- Help fund equipment for a national program to improve outcomes for blood cancer patients.
- Help determine the molecular structure of proteins in seconds for new cancer drug development.
Boost your tax return this year and make a tax-deductible donation to ACRF
All donations of $2 or more to ACRF, at any time of the year, are tax deductible but there has never been a better time to give than now.
Our tax time appeal runs to 30 June, with 100% of your donation going towards vital cancer research. Help us reach a world without cancer, donate here.
