DGR Status Explained: What It Is and Whether You Need It for Grants

If you have looked at philanthropic grants for long, you will have seen the phrase "applicants must have DGR status". For many small organisations that line ends the search. But DGR status is often misunderstood. Not every grant needs it, not every charity has it, and there are ways to work with funders even if you do not.

This guide explains what DGR status is, how it relates to being a registered charity, and how to decide whether it matters for your organisation.

What DGR status is

DGR stands for Deductible Gift Recipient. An organisation with DGR endorsement can receive gifts that the donor can claim as a tax deduction.

That is the whole point of it: DGR status is about the donor's tax position, not about whether your organisation does good work.

Key facts:

The Australian Taxation Office (ATO) endorses organisations as DGRs. Since 1 January 2024, the ATO administers all DGR categories.
The ACNC registers charities. The Australian Charities and Not-for-profits Commission decides whether an organisation is a registered charity. It does not grant DGR status.
Being a charity is not the same as being a DGR. Many registered charities are not DGRs. According to the ACNC, only around 38 per cent of registered charities are endorsed as DGRs.
Most DGR categories now require charity registration. From 1 January 2024, organisations generally need to be registered with the ACNC to be eligible for DGR endorsement, with limited exceptions such as government entities, ancillary funds and organisations specifically listed in tax law.

Why some grants require DGR status

The main reason is tax law, not a judgement about you.

Many private and public ancillary funds, which are a common structure for family foundations and community foundations, are generally only allowed to give money to organisations with DGR status. When a foundation says "DGR only", it is usually because the rules governing its own tax concessions require it.

Other funders may ask for DGR status as a simple way to screen applicants, or because they prefer to fund charities with that endorsement.

Which grants usually do not require DGR status

Plenty of funding is open to organisations without DGR status:

Most government grants. Federal, state and local government grants usually require you to be a legal entity, such as an incorporated association, and to meet program criteria. DGR status is rarely a requirement, although some programs ask for charity registration.
Council community grants. Usually open to incorporated not-for-profits in the area. See our guide to council community grants.
Many corporate and business community programs.
Gaming and club benefit funds in states that have them.
Some foundations that are structured in ways that let them fund non-DGR organisations for charitable purposes.

Always check each grant's eligibility section. Do not assume.

How to check whether your organisation has DGR status

Search your organisation's name or ABN on ABN Lookup (abr.business.gov.au). The record shows whether the organisation is endorsed as a Deductible Gift Recipient and, if it is, the type of endorsement. Charity registration is shown on the ACNC Charity Register.

It is worth checking even if you think you know. Some organisations hold DGR endorsement only for a specific fund, not for the organisation as a whole, and some lose it after a change of purpose or structure.

Can your organisation get DGR status?

To be endorsed, your organisation has to fit one of the DGR categories set out in tax law, such as a public benevolent institution, a health promotion charity, a harm prevention charity, a cultural organisation, an environmental organisation or certain school building and library funds. Each category has its own requirements. You also generally need to be registered as a charity with the ACNC, and your governing documents usually need specific clauses, such as how gifts are handled and what happens to assets if you wind up.

Some practical points:

Not every good cause fits a category. Many community groups, sporting clubs and social clubs do not fit any DGR category, however valuable their work.
The process takes time. Registering as a charity and then applying for DGR endorsement can take months, and may require changes to your constitution.
There are ongoing obligations. DGRs must use gifts properly, keep records and issue correct receipts.

The ATO website lists the DGR categories and their requirements. For anything beyond the basics, speak to a lawyer or accountant who works with not-for-profits, or a not-for-profit legal service in your state.

Options if you do not have DGR status

Partner with a DGR-endorsed organisation

If a project fits within the purposes of another DGR-endorsed organisation, you may be able to apply through them in a genuine partnership or auspice arrangement. The partner organisation takes responsibility for the grant, so it must have real oversight of the project and how money is spent. Funders will want to see that this is a genuine arrangement, not just a channel for money. Agree the roles, reporting and any administration fee in writing.

Use an established donation platform for your sector

Some sectors have established intermediaries. For example, the Australian Sports Foundation is a charity that lets incorporated community sporting clubs raise tax-deductible donations through its platform. Check the current terms, fees and eligibility rules before you rely on any intermediary.

Focus on funders that do not require DGR status

Government grants, council grants and many corporate programs are open to incorporated not-for-profits without DGR. GrantFinder Pro takes your organisation type into account when matching, though you should still check each grant's own eligibility rules.

Consider whether DGR status is worth pursuing

If your organisation relies heavily on donations or wants to approach foundations, DGR endorsement may be worth the effort. If most of your funding comes from government grants, membership fees and events, it may not be worth the time. Make the decision based on where your money actually comes from.

DGR status beyond grants

It is worth remembering that DGR status affects more than grant applications. It also shapes your wider fundraising:

Individual donors can only claim a tax deduction for gifts to a DGR, which can make appeals more attractive, especially at the end of the financial year.
Workplace giving programs usually only direct donations to DGR-endorsed organisations.
Bequests and major gifts from people planning their estates are often directed to DGRs.
Receipts must meet ATO requirements if you issue tax-deductible receipts, and donations must be handled according to the rules for your DGR category.

If your organisation does not rely on these income streams, DGR status may matter less than you think. If you want to grow donations, it may matter more.

Common misunderstandings

"We're a not-for-profit, so we're a charity." Not necessarily. Many not-for-profits, including many sporting and social clubs, are not charities.
"We're a charity, so donations are tax deductible." Only if you also have DGR endorsement.
"We need DGR status to apply for any grant." No. Most government and council grants do not require it.
"An auspice partner can just pass the money through." No. The auspicing organisation is accountable for the grant and must genuinely oversee it.

Quick checklist

Checked ABN Lookup for your DGR status
Checked the ACNC Charity Register for charity registration
Read each grant's eligibility section for DGR, charity or incorporation requirements
Identified funders that do not require DGR
Considered a genuine auspice or partnership arrangement where suitable
Sought professional advice before changing your constitution or applying for endorsement

Find grants that fit your structure

See which grants match your organisation, free, at grantfinderpro.com.au/find. Matches are a rough guide to eligibility, so always check each grant's guidelines for DGR or charity requirements. You can also read our grant eligibility checklist.