Your organisation wants to protect the environment as an environmental charity and register with the Australian Charities and Not-for-Profits Commission (ACNC). But you would like to get tax concessions and gain Deductible Gift Recipient (DGR) status which requires registering with the Department of Environment who maintain the Register of Environmental Organisations. Below, we provide a brief overview of the process and what you need to consider.
Step 1: Register With the ACNC
Firstly, you need to register with the ACNC to become a charity that advances the natural environment. When preparing your application, you will need to provide details about your charity, such as the:
- Australian Business Number;
- Australian Company Number;
- organisation name;
- primary contact and business address;
- governing documents (for instance, your constitution or trust deed);
- beneficiaries of your charity;
- states, territories and countries your organisation intends to conduct its activities;
- people responsible in your organisation (for instance, board members); and
- financial information such as your charity’s income and expenditure.
Step 2: Set Up a Public Fund
To apply to be on the Register of Environmental Charities, you must set up and maintain a public fund. The DGR status applies to the fund.
A public fund is usually a trust or association which is set up as a separate entity from the organisation. Your constitution must include a clause allowing your organisation to set up the fund and members of the public to donate. You must also have a clause detailing what happens in winding up the public fund. The fund is required to have its own name so you can identify it from your organisation.
The fund must have a bank account, managed by a management committee which the organisation appoints. Management committees are usually made up of a sub-committee from your organisation’s committee or are the organisation’s management committee.
Step 3: Register With the Register of Environmental Charities
Once you have registered with the ACNC, you can then apply to the Department of Environment to be listed on the Register of Environmental Charities. Once you are entered onto the register, your application is usually passed onto the ATO for DGR endorsement.
For registration, the Department will check to make sure that your principal purpose is either:
- educating the community or carrying on research about the natural environment; or
- protecting and enhancing the natural environment.
This is different to other types of environment such as built, cultural and historic environments. You may also be able to conduct more than one activity but your main activity that takes up the majority of your organisation’s time and resources must be for these purposes.
The Department may also require you to be a body corporate, co-operative society, trust or unincorporated body. If you have set up an incorporated association or company limited by guarantee you will be a body corporate, but you must also have:
- members consisting principally of body corporate members; or
- at least 50 individual members who are entitled to vote at a general meeting. Note that organisations can seek an exemption from this requirement, but they are rarely granted.
The Department also requires that your organisation submits a statistical return form annually.
The application process with the Department of Environment can take over 12 months and does vary depending on the complexity of the organisation. It’s a good idea to contact them and ask for an estimate of the wait time before applying.
Additional ATO Requirements
Importantly, although an organisation can apply for charity registration and DGR endorsement in the same online registration, only the ATO can decide on DGR status.
The Australian Taxation Office (ATO) requires your organisation include a DGR revocation clause in your constitution. This clause signals that the organisation is required to transfer any surplus gifts, deductible contributions and related money to another DGR if the charity winds up.
Obtaining DGR status as an Environmental Organisation involves three government bodies:
- the ACNC;
- the Department of Environment; and
- the ATO
Each government body has specific requirements, and the approvals process can be extremely lengthy. But you can deal with these requirements and avoid unnecessary delays by updating or setting up the clauses in your constitution correctly and ensuring your application process ticks all the right boxes.