Donor Tax Incentives for Cultural Gifts

It’s not just tax incentives on money or property that organisations can offer to prospective donors…now their works of art can attract benefits for everyone!

Recent changes to tax concessions surrounding donations of art or so called ‘cultural gifts’ have seen some remarkable increases in bequests according to Federal Government figures.

Under the Commonwealth’s re-vamped Cultural Gifts Program and its Register of Cultural Organisations designed to encourage private sector philanthropy, participating organisations received $24 million in revenue from private sources last financial year – an increase of $5 million on the previous year.

Recent changes to the tax system benefit public collecting institutions participating in the Cultural Gifts Program in the following ways.
 Gifts of cultural property under the Commonwealth Government’s Cultural Gifts Program or bequests to public museums, galleries and libraries attract no capital gains tax.
 Deductions for Cultural Gifts Program gifts can be apportioned over a period of up to five years, enabling donors to realise the full benefit of their tax deduction.
 Gifts of assets valued at more than $5,000 (such as land, buildings, equipment or shares) are tax deductible if purchased by the donor more than 12 months before making the gift. Deductions for these gifts after 1 July 2002 will be able to be apportioned over a period of up to five income years.
 Private funds may apply to the Australian Taxation Office for tax deductibility status. This enables benefactors to support other tax-deductible organisations, such as galleries, museums and libraries without the need to actively seek donations from the general public (through advertising for example).

The Cultural Gifts Program aims to encourage private collectors to donate often valuable and sentimental pieces to public bodies. Some of the amazing pieces acquired through the program by museums, galleries and libraries across Australia are testament to how difficult a decision this must sometimes be.

In December, David Jones Ltd donated an outstanding group of sculptures by Auguste Rodin to the Art Gallery of New South Wales, including a complete set of bronze casts “The Burghers of Calais” regarded as one of Rodin’s greatest achievements.

The Register of Cultural Organisations set up by the Commonwealth in mid-2000 allows Not for Profits to offer 100% tax deductibility for donations from their supporters.

Government figures show that 834 organisations are now registered. The most expensive gift donated through the Cultural Gifts program was an Old Master painting valued at $4.8 million.

The most recent additions to the register include:

 Lake Macquarie Music Society Incorporated—Toronto, NSW
 Moonbird Heritage Trust Incorporated—Hobart, TAS
 Norwood Concert Hall Piano Association Incorporated—Norwood, NSW
 Onkaparinga City Band Incorporated—McLaren Vale, SA
 Port Fairy Spring Music Festival Inc—Port Fairy, VIC
 Queensland Folk Federation Incorporated—Woodford, QLD
 Shepparton Theatre Arts Group Incorporated—Shepparton, VIC
 Tangent Productions Incorporated—Adelaide, SA

If you would like a Fact Sheet on either the Cultural Gifts Program or the Register of Cultural Organisations send us an e-mail to probono@probonoaustralia.com.au.

The Commonwealth department web site is at www.dcita.gov.au.