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Smarter ways to donate to your favourite charity

It feels good to give, but there are ways to make it tax-effective for you too.


If you’ve ever supported a GoFundMe campaign for a bushfire victim or dropped some coins into a busker’s guitar case, you’ll know it feels good to give.


But giving when something tugs at your heartstrings isn’t necessarily an effective way to do it. Often those kinds of ad-hoc donations are not planned and they are rarely sustained over time. There may be money pouring in for bushfire victims one month and flood victims the next, depending on the newspaper headlines.


From a financial perspective such donations may not be eligible for a tax deduction.

The Australian Tax Office regards donations to a personal crowdfunding campaign as a personal gift, for instance, which means you can’t claim a tax deduction for your generosity. Even if you give to a charitable organisation it must have deductible gift recipient status if you want to claim a deduction through your tax return.


Charities know that the possibility of a last-minute tax deduction can prove persuasive at this time of year. As we race towards the end of another financial year they will be doing their best to hit you up for a donation.


But ticking the tax deduction box may not deliver the same dopamine hit as clubbing together with your network to support an inspirational crowdfunding campaign.


So what to do?


The good news is you can express your generosity in a way that should tick all the boxes. Known as giving circles, they offer the joy of giving with other like-minded people as well as the possibility of a tax deduction. The collective giving is planned and aimed at delivering a high impact.


The other bonus is you can get started with relatively small amounts.


Giving circles, such as Impact100 WA and similar ones based in Sydney, Melbourne and Brisbane, typically involve 100 people donating $1000 each year to make a collective grant of $100,000 to a charitable organisation.


Members get involved in assessing applications, making site visits to charities, and voting on which organisation to support from a short-list of possibilities.

The Impact100 giving circles are structured through foundations such as the Sydney Community Foundation and the Australian Communities Foundation. So donations are tax deductible and the funds are held by the foundation. Some giving circles target a particular theme or cause.


In Queensland the Women and Change giving circle has donated $300,000 since its launch in 2014. The money has been directed to teenage carers, children suffering chronic pain, refugee women moving from welfare to work, and victims of sexual assault in regional Queensland.


Other giving circles turn their attention and funds to a particular community.

The Channel giving circle, launched in 2016, specifically supports rainbow (LGBTQIA+) causes. It has distributed more than $150,000 in grants to rainbow community projects across Australia and supported more than 50 rainbow community organisations.

The concept of giving circles is continuing to expand in Australia.


In the past year some corporates have begun experimenting with workplace giving circles, encouraging employees to club together to support a particular charity or cause.


How good is it when everyone can win!



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Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.



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