A New Era for Community Foundations: Major Reform Unlocks Exciting Opportunities
A groundbreaking reform is reshaping the future of community philanthropy in Australia, paving the way for community foundations to thrive like never before. With the release of the Taxation Administration (Community Charity) Guidelines 2025, a newly established pathway to Deductible Gift Recipient (DGR) status for community foundations marks a pivotal moment for the sector. Effective as of February 24, 2025, this change is set to open doors to more funding, greater flexibility, and expanded impact.
What Are Community Foundations?
Community foundations are grassroots, locally driven organizations that pool donations from individuals, businesses, and institutions to support local initiatives. Operating as trusts, they raise and invest funds for long-term sustainability, distributing grants to causes that strengthen social cohesion and nurture community spirit. Local volunteers play an essential role in managing funds, operations, and engagement with the community.
However, until now, community foundations faced a significant roadblock: they were unable to access funding from Private Ancillary Funds (PAFs)—the primary vehicle for private giving by individuals and families—because they lacked DGR status.
Breaking Down Long-Standing Barriers
For over two decades, community foundations struggled with tax and regulatory restrictions that hampered their ability to secure essential funding. The recent reform marks the successful culmination of more than 20 years of tireless advocacy by the philanthropic sector.
Ben Rodgers, Chair of Community Foundations Australia, celebrated the shift, saying, “This reform is the result of over 20 years of dedicated advocacy, creating a more supportive tax and regulatory environment that recognizes the critical role community foundations play in fostering thriving communities across Australia.”
Maree Sidey, CEO of Philanthropy Australia, echoed his enthusiasm: “It’s vital that our policies and regulations make it easier for people to give. This reform removes significant barriers and will help direct more resources to vital community initiatives.”
Fueling the Growth of Philanthropy
Dr. Andrew Leigh MP, Assistant Minister for Charities, underscored the importance of the reform: “By simplifying paperwork and expanding eligibility for tax-deductible donations, the Government is ensuring that more funds reach the charities making a real difference in people’s lives.”
Beyond this change, the government has committed to further strengthening Australia’s charity and nonprofit sector, including:
- Streamlining the DGR application process for various charitable organizations.
- Enhancing transparency and the regulatory framework of the Australian Charities and Not-for-profits Commission (ACNC).
- Supporting charitable advocacy and expanding research on volunteerism and community engagement.
A Bright Future for Community Philanthropy
With bipartisan support, this reform represents a significant step forward for community foundations, allowing them to mobilize resources and drive meaningful social impact more effectively. It’s a win for both local communities and the broader philanthropic ecosystem that has long championed the power of local giving.
As Australia strives to double charitable giving by 2030, these changes empower communities to take control of their futures. This reform marks the dawn of a new era for community foundations, where their crucial work will not only continue but flourish, creating lasting change for generations to come.
Please get in touch with Warlows Legal today if you require any assistance with your charity.
