The art of giving: how to make your philanthropy work harder for the causes you love
There’s something deeply satisfying about giving to a cause you believe in. What’s even better? Doing it in a way that benefits both the charity and your own tax position. Charitable giving in Australia is more structurally sophisticated than most people realise, and with the right strategy, generosity and smart tax planning go hand in hand.
The starting point: deductible gift recipients (DGRs)
Not every charitable donation is tax-deductible. To claim a deduction, your gift must go to an organisation with Deductible Gift Recipient (DGR) status endorsed by the ATO, and it must be a genuine, voluntary transfer of money or property with no material benefit returned to you[1]. Gifts of $2 or more to a DGR are deductible, so always keep your receipts.
It’s a small but important distinction, as many popular crowdfunding platforms and community campaigns are not DGRs, meaning donations to them cannot be claimed. Always check via the ATO’s ABN Lookup tool.
For larger gifts, the rules evolve. Gifts of property or shares follow different rules depending on type and value, and in some cases, large deductions can be spread over up to five income years.
Structured giving: private giving funds
For clients who want to take their philanthropy beyond one-off donations, a Private Giving Fund (PGF), formerly known as a Private Ancillary Fund, is one of Australia’s most powerful philanthropic tools. You contribute cash or assets, receive an immediate tax deduction, and the fund’s investments grow completely tax-free, with earnings distributed annually to eligible DGR charities of your choice.
This structure is evolving. On 26 February 2026, the Government announced that Private and Public Ancillary Funds will be renamed Private and Public Giving Funds, and the minimum annual distribution rate for both will rise to 6% of net assets[2], up from the previous 5% for private funds. A three-year distribution smoothing provision has also been introduced, giving fund managers more flexibility without forcing them to overdraw on capital in any single year. These changes are not yet law but are expected to take effect following amendments to the relevant guidelines.
Using super for philanthropy, and leaving a legacy
Superannuation cannot be directly bequeathed to a charity via a binding death benefit nomination. Under super law, death benefits can only be paid to superannuation dependants, the estate, or a combination of both. So if you want a charity to benefit, you should ensure your super is directed to your estate and distributed via your Will. This makes a current, legally valid Will and an up-to-date super nomination working in tandem absolutely essential. Some high-net-worth individuals are establishing PGFs as a structured vehicle to receive estate assets, particularly as a strategy to reduce super balances ahead of the Division 296 tax on balances exceeding $3 million.
How an adviser adds real value
The intersection of tax, super, estate planning, and philanthropy is not territory to navigate alone. A financial adviser can:
- Confirm DGR status of your preferred charities before you commit to a large gift.
- Model whether a Private Giving Fund makes sense given your income, tax rate, and philanthropic goals.
- Work with your nominated legal practitioner to integrate charitable bequests into your estate plan, ensuring your Will, super nomination, and any philanthropic structures are legally aligned and tax-efficient.
- Identify high-CGT assets (such as shares with large embedded gains) that may be donated to a DGR, potentially allowing an exemption from capital gains tax while still generating a tax deduction.
- Time large donations across financial years to make the most of deduction benefits.
Giving well is a skill. With the right advice, what you leave behind can reflect not just your wealth, but your values.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
