DGR Endorsement for Accountants 2026

DGR endorsement is the ATO’s approval for an organisation, or an eligible fund it operates, to receive tax-deductible gifts. For your charity client, identify the category first, then prepare the governing clauses and records that support that application.

Separate Registration From Endorsement

Charity registration and deductible gift recipient (DGR) endorsement are separate decisions. The Australian Charities and Not-for-profits Commission (ACNC) registers charities. The Australian Taxation Office (ATO) decides DGR endorsement under the relevant tax-law category.

A registered charity can qualify for tax concessions without qualifying for DGR endorsement. Record both statuses separately in the client file. The ACNC’s DGR guidance explains the distinction and the application routes.

Endorsement can cover the whole organisation or a particular fund, authority or institution it operates. If the endorsement covers only a fund, gifts to the organisation’s other activities do not gain deductible status through that endorsement.

For example, a fictional charity operates several community programs and a separately endorsed school building fund. Record the fund’s endorsed scope when setting up donation records. Do not describe the whole charity as endorsed on the strength of that fund’s approval.

Identify the DGR Category

Match the client’s purposes and activities to a DGR category before preparing the application. A general commitment to helping the community does not establish category eligibility.

Use the ATO’s DGR category table to record the category and item number. Then read the conditions and any application schedule linked to that category. The ATO’s endorsement application instructions explain how category items and supporting schedules fit the application.

Build a short eligibility record for the file:

• State whether the applicant seeks whole-organisation endorsement or endorsement for a fund it operates.
• Match each relevant purpose to the governing document and explain the activities that carry it out.
• Record the category’s charity-registration requirement, including any required subtype or applicable exception.
• Identify geographic conditions and any required approvals or fund arrangements.
• List the unanswered client questions that prevent you from confirming a condition.

Avoid a universal rule that every DGR must be an ordinary registered charity. The ACNC identifies exceptions for government organisations, giving funds and entities specifically listed in tax law. A charity client still needs to meet the requirements of its selected category.

Public Benevolent Institution Clients

A Public Benevolent Institution (PBI) is an ACNC charity subtype. Under the PBI route, the organisation needs ACNC registration with that subtype and must meet the separate ATO endorsement conditions. The registered PBI category has item number 4.1.1.

The ACNC’s PBI guidance examines whether the organisation is an institution organised for benevolent relief of people in need. Its activities must address need beyond the distress of ordinary daily life.

For a PBI client, request its subtype decision and an explanation of who receives relief. Collect program descriptions and beneficiary criteria. Where another organisation delivers the relief, obtain the collaboration agreements and records showing how the client’s work supports that relief.

An organisation that occasionally gives money to PBIs does not establish its own PBI status through those gifts. If the records describe general grant-making, resolve that mismatch before relying on the PBI category.

Review the Governing Documents

Review the actual governing document against the selected category and scope. A copied sample clause cannot prove that the client’s purposes or activities qualify.

Ask the client for these documents:

• The complete constitution, rules or trust deed, including amendments.
• Any separate governing rules for the fund seeking endorsement.
• The resolutions and approvals supporting amendments to those documents.
• The relevant purpose, not-for-profit and winding-up clauses, with clause numbers marked.
• The DGR revocation clause and any category-specific restrictions on the recipient of surplus assets.
• Gift-fund rules and accounting records where that category or endorsement scope requires them.

Check both winding up and loss of DGR endorsement. The applicable rules must deal with the required surplus gifts or gift-fund assets when the earlier event occurs. An ordinary winding-up clause alone may leave revocation unaddressed.

Gift-fund requirements depend on the route. Whole-organisation endorsement does not automatically require a separate gift fund, while certain categories impose their own requirements. For endorsement covering an operated fund, check the ATO’s gift-fund requirements.

Where required, trace gifts and deductible contributions into the gift fund, including money received because of those gifts. Check that other money stays outside it and that spending follows its principal purpose. A separate bank account alone does not establish that the governing rules meet these conditions.

If a clause is missing or unsuitable, arrange the appropriate amendment and retain the adopted version. Check that the client follows its own amendment rules before treating proposed wording as effective.

Prepare the Endorsement Application

Choose the application route from the client’s existing registration status. A charity applying for ACNC registration can request tax concessions and DGR endorsement within that application. The ACNC passes the relevant information to the ATO after successful charity registration.

An already registered charity seeking DGR endorsement applies directly to the ATO. The ACNC registration checklist also warns against duplicating a DGR application already submitted separately.

Prepare the request in this order:

1. Confirm the applicant’s legal name and active ABN against its governing document and registration records.
2. Confirm who can act for the organisation. Check ATO authorisation separately from the ACNC declaration, including agent nomination where applicable.
3. Enter the selected category and item number. Identify whether endorsement covers the organisation or a named fund, authority or institution.
4. Record the requested commencement date and assemble records supporting eligibility from that point.
5. Provide the governing documents, relevant clause numbers and any schedule required for the chosen category.
6. Check that the signed declaration and supporting answers describe the same activities and endorsement scope.

Before sending the application, compare it with your eligibility record. A PBI application paired with records of unrelated general activities needs further explanation. A request for fund-only endorsement needs the fund’s details and governing records, not just the parent charity’s name.

Keep the Endorsement Record

Retain the ATO decision with the application and the governing documents it supports. Record the effective period and exact endorsed scope so staff can distinguish the whole organisation from an operated fund.

Give the client a named person responsible for monitoring changes to purposes and activities. Include changes to governing clauses, fund operation and charity subtype in that person’s review. Assess whether each change affects eligibility or requires notification to the relevant regulator.

Keep the ongoing reporting task separate. The not-for-profit financial reporting guide covers the financial statements and assurance work that can sit alongside this file.

Complete the handover with the endorsed scope, the documents relied on and the person who must raise a change. Those records give the next accountant a basis for reviewing continued eligibility without rebuilding the original application.