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Advice & Support
Take control of where your dollars go this EOFY by making a tax-deductible donation and redirecting your tax to the causes you care about most, win-win!
Why donate to charity at the end of financial year? Donating to a tax-deductible charity before June 30 is a great way to boost your tax return while making a difference on the issues that matter to you.
When you make a tax-deductible donation, you can claim this on your tax return, meaning you get a higher refund on the tax you paid throughout the year or a reduction on the amount you owe.
Are all donations tax-deductible? Not quite. In Australia, a tax-deductible donation is a gift of $2 or more to an organisation endorsed as a deductible gift recipient (DGR).
Here are our top five tips for getting the most out of your charitable giving at tax time.
1. Don’t wait until the last minute
Many of us wait until the very end of the financial year to make our charitable donations, but doing this makes it difficult to follow the tips below.
Start thinking now about your EOFY giving – how much you want to give and the causes and organisations you want to support. Stuck for ideas? Head to Australian Communities Foundation’s Granting Opportunities platform for a list of not-for-profit organisations currently seeking funding. You can filter by cause area, location, tax-deductibility status and more.
2. Consider your tax rate
Consider which bracket you expect your income to fall within this year when planning your EOFY giving. Here’s a handy table to help you calculate your tax rate this financial year.
Tax rates 2021-2022
| Taxable income | Tax on this income |
| 0 – $18,200 | Nil |
| $18,201 – $45,000 | 19 cents for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45 cents for each $1 over $180,000 |
Take this example: if your taxable income is $190,000, you fall within the highest tax bracket, where your tax rate is 45 cents for every dollar you earn over $180,000.
If you were to contribute $5,000 to a tax-deductible charity, this would only cost you $2,250 (the value of the donation minus the 45% tax you would have otherwise paid). Meanwhile, your chosen charitable organisation receives the full $5,000.
You might then choose to donate an additional $5,000 so that your taxable income is reduced to the fourth bracket, where the highest rate you’re paying is 37%.
3. Know you’re giving to the right charity
There are 56,000 registered charities in Australia, approximately 30,000 of which can receive tax-deductible donations (known as deductible gift recipients or DGRs). Deciding where to give your donation can be daunting but there’s help available.
Your local community foundation can introduce you to a range of trusted organisations through their deep connections to local communities. Australian Communities Foundation, Australia’s only national community foundation, can connect you with tax-deductible charities across the country working on the issues you care about most.
4. Avoid large transaction fees
When donating via credit card online, you will almost always be charged a processing fee. For smaller donations, say $1,000 or under, it is likely worth paying the fee to avoid the hassle of arranging another payment method with the charity. But for larger donations that come with a higher fee, it might be worth contacting the charity to see what other payment options are available.
Note that there can also be delays with larger online transactions as these are often flagged by credit card companies – keep this in mind if donating right before June 30!
5. Open your own fund: give now, decide later
Ready to take a more strategic approach to your giving? Want to get your family involved for the long term? Or just not sure which causes or charities you want to support yet?
Opening a fund for your giving is a great option.
A donor-advised fund (or DAF, sometimes known as a sub-fund) is a giving account that allows you to make an initial donation, receive an immediate tax deduction and then choose where your donations go when you’re ready.
At Australian Communities Foundation, we call these Named Funds because they enable you to put a name on your giving. All you need to do is make your first donation and you’ll receive an immediate tax deduction. Your funds are ethically invested, meaning your money does good in the community while it waits to be granted out to the causes of your choosing.
Ready to give?
The EOFY period is a busy time. If you’re not sure which causes or charities you want to donate to but still want to enjoy a tax deduction, opening a fund is your answer.
Establish a donor-advised fund and then take your time – meeting that June 30 deadline is no longer necessary! When you’re ready to support your chosen causes, we can take care of the administration and compliance and help you maximise your impact, allowing you to focus on the joy of giving.
Learn more or contact us below.
Left it to the last minute? It’s not too late! We can help you get set up in as little as 48 hours.
Final note: The above is not tax, legal, or financial advice. We recommend speaking to your accountant, lawyer, or financial adviser for specific advice for your situation.