Tax-Deductible Donations and DGR Status in Australia

What is a deductible gift recipient?

A deductible gift recipient (DGR) is an organisation endorsed by the Australian Taxation Office (ATO) to receive tax-deductible donations. When a donor gives money or property to an organisation with DGR status, they can claim that donation as a deduction on their income tax return — reducing their taxable income for the financial year.

DGR endorsement is not automatic. Organisations must apply through the ATO and meet specific eligibility criteria under the Income Tax Assessment Act 1997. Not every charity or nonprofit qualifies. An organisation can be a registered charity with the Australian Charities and Not-for-profits Commission (ACNC) without being a DGR — and vice versa, though most DGRs are also registered charities.

There are two types of DGR endorsement. Type 1 DGRs receive tax-deductible gifts in their own right. Type 2 DGRs are funds, authorities, or institutions named specifically in the tax legislation. The distinction matters for how the organisation is listed on the ATO's DGR register and how donors verify their deduction eligibility, but from a fundraising event perspective, the practical effect is the same: gifts to either type are deductible for the donor.

Donors can verify an organisation's DGR status on the Australian Business Register by searching the organisation's ABN. This is worth mentioning at your events — guests who know their donation is tax-deductible tend to give more generously.

How DGR status affects event fundraising

Here is where it gets practical for event organisers. At a fundraising event — a gala dinner, a charity auction, a golf day — money changes hands in several ways. Not all of those payments are tax-deductible, even if your organisation has DGR status.

The ATO's rule is straightforward: a gift is only tax-deductible if the donor receives no material benefit in return. The moment a donor receives something of value — a meal, an auction item, a raffle prize chance — the payment (or part of it) is no longer a gift. It is a purchase.

This creates a practical split at every fundraising event:

• Tax-deductible: Direct donations where the donor receives nothing in return — paddle raises, fund-a-need appeals, text-to-give contributions, and donations made at giving stations.
• Not tax-deductible: Ticket purchases (the guest receives a meal and entertainment), raffle tickets (the buyer receives a chance to win), and the fair market value portion of auction purchases.
• Partially deductible: Auction purchases where the winning bid exceeds the item's fair market value — the amount above FMV may be deductible.

Getting this right on your receipts is not optional. Issuing a tax-deductible receipt for a non-deductible payment exposes your organisation to ATO scrutiny and your donors to incorrect tax claims.

Auction items and tax deductibility

Auction items — whether sold through a silent auction or a live auction — create the most common confusion around tax deductibility at events.

The rule: when a donor wins an auction item, they receive something of value. The fair market value (FMV) of that item is not tax-deductible. If the winning bid exceeds the item's FMV, the amount above FMV may be deductible — but only if the organisation has DGR status and the donor intended the excess as a gift.

For example, a holiday package with an FMV of $3,000 sells at auction for $4,500. The $3,000 item value is a purchase, not a donation. The $1,500 above FMV may be claimed as a tax-deductible donation if the organisation is a DGR and the receipt clearly separates the two amounts.

This means your auction catalog needs accurate fair market values for every item — not inflated estimates, not retail wish prices, but genuine market values that would hold up if the ATO asked. Overstating FMV to make the "donation portion" look larger is a compliance risk your organisation does not need.

For practical guidance on building the right catalog for your event, see silent auction ideas that drive higher bids.

Raffle tickets are not tax-deductible

This surprises many Australian fundraisers, but it is clear in the ATO's guidelines: raffle tickets are not tax-deductible, even when the raffle is run by a DGR organisation.

The reason is simple. When someone buys a raffle ticket, they receive something in return — a chance to win a prize. That makes it a purchase, not a gift. It does not matter whether the ticket costs $5 or $500, whether the buyer expects to win or not, or whether the raffle raises money for a charitable cause. The ATO treats raffle ticket purchases the same way it treats buying a meal at a charity dinner: the donor received a benefit, so the payment is not deductible.

This does not mean raffles are a bad fundraising tool — they are effective, popular, and can raise significant revenue with relatively low effort. It just means you cannot issue tax-deductible receipts for raffle ticket sales, and your marketing materials should not imply the purchase is deductible.

Charity raffles in Australia: state-based licensing

Running a charity raffle in Australia is not as simple as printing tickets and drawing a winner. Each state and territory has its own legislation governing charitable gaming, and the rules vary significantly.

Licensing requirements by jurisdiction

Most states require a permit or licence to conduct a raffle, but the thresholds and application processes differ:

• New South Wales: Raffles with a total prize value over $30,000 require a Community Gaming licence from Liquor & Gaming NSW. Smaller raffles conducted by nonprofits may qualify for an exemption but still need to follow prescribed rules.
• Victoria: Charitable organisations registered with the Victorian Commission for Gambling and Liquor Regulation (VCGLR) can conduct raffles under a Community and Charitable Organisation registration. Prize value thresholds determine the level of registration required.
• Queensland: Raffles are regulated by the Office of Liquor and Gaming Regulation. Eligible community organisations can conduct raffles under specific conditions, with requirements varying by total prize value.
• Western Australia: The Department of Local Government, Sport and Cultural Industries issues raffle permits. WA has some of the strictest charitable gaming rules in the country.
• South Australia: The Consumer and Business Services division handles raffle permits. Different rules apply depending on whether the raffle is a "small lottery" or a larger fundraising lottery.
• Tasmania, ACT, Northern Territory: Each has its own gaming authority and permit requirements for charitable raffles.

Common requirements across jurisdictions

Despite the state-by-state variation, several rules are nearly universal:

• The organisation conducting the raffle must be a bona fide nonprofit or charitable body.
• Raffle proceeds (minus prizes and reasonable expenses) must go to the organisation's charitable purpose.
• Prizes must be described accurately in all marketing materials.
• Winners must be drawn in a manner that is fair and verifiable.
• Results must be published or made available to ticket holders.
• Records must be kept for a specified period (typically 3 to 7 years depending on the state).

momoGood's raffle platform supports regional configuration so your event can comply with the specific requirements of the state or territory where your raffle is conducted — including ticket limits, prize disclosures, and draw procedures.

Direct donations at events

The most straightforward path to tax-deductible giving at an event is the direct donation — a contribution where the donor receives nothing in return. These come in several forms:

Paddle raise / fund-a-need

The paddle raise (also called fund-a-need or special appeal) is a moment during the event program where the host or auctioneer asks guests to raise their paddles or hands to pledge a donation at specific dollar amounts — $10,000, $5,000, $2,500, $1,000, and down. No item is exchanged. The donor is giving purely to support the cause. These pledges are tax-deductible when the organisation has DGR status.

Text-to-give

Text-to-give allows guests to donate by sending a text message or tapping a link on their phone. Because no goods or services are provided in return, these donations are tax-deductible for DGR organisations. Text-to-give is particularly effective during paddle raises — guests who are uncomfortable raising their hand in a room can donate privately from their seat.

Giving stations and QR codes

Physical giving stations or QR codes placed around the venue let guests donate at their own pace throughout the event. Again, because no benefit is provided in return, these are deductible gifts when the organisation holds DGR status.

The key for all direct donations: your receipt must clearly state that no goods or services were provided in exchange for the gift, and it must include your organisation's ABN and DGR status.

How momoGood handles Australian events

momoGood's events and auctions platform is built to handle the specific requirements of Australian fundraising events:

• AUD processing: Accept donations and auction payments in Australian dollars with local payment processing, including BECS Direct Debit for bank-to-bank transfers — a payment method widely used by Australian donors that international platforms often do not support.
• Automatic receipt generation: Receipts are generated automatically after every transaction. For organisations with DGR status, receipts include the information required by the ATO — your ABN, DGR endorsement details, the date, the amount, and a statement confirming whether goods or services were provided in exchange.
• Auction and donation separation: For auction purchases where the winning bid exceeds fair market value, the platform can separate the item purchase from the donation portion — so your receipts accurately reflect what is and is not tax-deductible.
• Raffle compliance: momoGood's raffle tools support the state-based configuration Australian organisations need — ticket limits, prize value disclosures, and draw procedures that align with your jurisdiction's requirements.
• Multi-format events: Run a silent auction, live auction, raffle, and paddle raise all within the same event — with each transaction type receipted correctly.

See pricing for momoGood Events & Auctions to understand what is included.

Common mistakes Australian nonprofits make at events

After working with fundraising organisations across Australia, these are the mistakes that come up most often:

1. Issuing tax-deductible receipts for raffle tickets

This is the most common error. Raffle tickets are not gifts — they are purchases. Issuing a deductible receipt for a raffle ticket sale is incorrect under ATO guidelines and puts both the organisation and the donor at risk.

2. Not separating auction item value from donation value

When a guest pays $5,000 for an item worth $3,000, only $2,000 is potentially deductible. Issuing a single receipt for $5,000 as a "donation" is wrong. Your receipting system needs to separate these amounts clearly.

3. Assuming charity registration equals DGR status

Being registered with the ACNC as a charity does not automatically grant DGR endorsement. Many organisations discover this gap when a donor asks for a tax-deductible receipt they cannot legally issue. Check your ABN Lookup entry before your event — and if you do not have DGR status, do not imply that donations are tax-deductible in your event materials.

4. Ignoring state raffle licensing

Running a raffle without the required permit can result in fines and reputational damage. The rules vary by state, the thresholds are different, and "we didn't know" is not a defence. Check your state's requirements well before the event — permit applications can take weeks to process.

5. Not stating the tax-deductibility status on the receipt

ATO-compliant receipts for tax-deductible gifts must include specific information: the organisation's name and ABN, the DGR endorsement details, the date and amount of the gift, and a statement about whether goods or services were provided. A generic "thank you for your donation" receipt is not sufficient.

6. Mixing event ticket revenue with donation revenue

A $200 gala ticket that includes a $150 dinner is not a $200 donation. If you want to allow guests to make a tax-deductible contribution above the ticket price, separate the ticket purchase from the donation on the payment form and receipt them separately.

momoGood does not provide tax or legal advice. Consult the ATO and qualified advisors for your specific situation.

Getting your event receipting right

The simplest way to think about tax deductibility at Australian fundraising events: if the donor gets something, it is not a gift. Direct donations with no benefit in return are deductible (if your organisation is a DGR). Auction purchases are deductible only for the amount above fair market value. Raffle tickets are never deductible.

Get your DGR status confirmed before the event. Set up your receipting system to separate deductible and non-deductible amounts. Communicate clearly to your guests about what is and is not tax-deductible — they will appreciate the transparency, and your compliance team will thank you.

If you are planning an Australian fundraising event and want to make sure your auction, raffle, and donation receipting is set up correctly, talk to our team.