Beyond Savings and Towards Meaning

Charities need to reclaim their tax narrative this 30 June, writes Lisa Grinham the CEO of Good2Give.

Tax is messy at the best of times. Where it’s spent, what’s exempt, who’s paying? (…who’s not).  Each discussion reveals another layer of #AustralianValues – each layer with very real implications for the health and heartbeat of our society.

And yet, despite cultural and community significance, the issue of “tax” is all too often lost to technocrat jargon that I don’t connect with, that I don’t relate to. An obscure narrative of “deficit”, “surplus” and “tax relief” – that’s about as fun as learning Latin in school.

Fundamentally, as far as our politicians, government and media are concerned, the story of tax is one of the economy. Forever designed to serve some abstract beast – instead of the people and environment it affects day in, day out.

Without the human story driving it forward, sharing what it represents culturally and why it’s important socially, it’s no surprise that the discussions at budget time and the end of the financial year fails miserably to capture people’s imagination. For many, meaning little more than the savings we can make and the deductions we can receive when 30 June comes around.

Leaving tax to one for economy doctors to fix has its risks. One of which includes deluding people’s understanding of the very concessions charities hold dear and their staff benefit from. Over the past three years, we’ve seen these poked at and challenged by Parliament – and all the while with very little squeak from the media, let alone our public supporters and donors.

Very little public attention was given to the Gillard government’s attacks to charities’ tax exemptions for profit-making activities. A tiny bit of interest was demonstrated in the Abbott government’s attempt to deny deductible gift recipient (DGR) status for politically active environmental charities.

It took years before the Fringe Benefits Tax exemptions for relatively well-paid medical professionals working for not-for-profits were capped. And as a sector, we rally little public support for extending DGR status for all registered charities, or for improving the outdated processes in which these concessions can be sought.

So much of our sector’s effort is expended on talking with supporters about the sexy new funding model, the heart-wrenching fundraising campaign. And they have their place. But we’re talking about incredibly important foundations for the sector that we struggle to gain sincere public interest in.

Tax exemptions directly affect the sector’s competitiveness for grants. Some of these exemptions support an organisation to retain service funds, others help a charity bridge the remuneration gap for hardworking personnel. And some tax structures are enough to encourage and support people to give when they may not otherwise do so.

As the end of financial year looms there’s an opportunity for us to reclaim the tax narrative. Why, and for what reason?

Because the tax benefits of donating equal more donations.

Charities jump through countless hoops to offer supporters tax deductions for their donations. First the charity has to be deemed eligible by the ACNC, and then approved by the ATO and State Consumer Affairs on a range of other criteria. Permission to offer these deductions is not quick and not simple. Not only are many charities revoked of their registration, many household names are also declined DGR status along the way.

Why go to all the effort?

Because this tax status offers a valuable incentive for supporters to donate. If high-income earners are looking for a way to tilt their tax return, a last minute EOFY gift might just do it. For many government and corporate grant programs it’s a deciding factor on when to fund programs, and it can be the message of campaigns to “give tax effectively” before 30 June, which invariably raises millions in additional donations each year.

Do we do it?

You bet. Right now, Good2Give is encouraging its corporate clients to reach out to their employees to make one final donation before EOFY. We’re also appealing to our registered charities to work with their corporate partners to run one last appeal.

We know the end of financial year is the time when our clients are looking to spend whatever remaining corporate giving budgets they have, or to match their employee giving. We know their employees increase their workplace giving donations or make one final donation to better their position with the good old tax return. It’s a thing and a calendar date that should be watched.

However, it is also the perfect opportunity to remind supporters and the public of just why they get the deduction in the first place. The why is the message that builds our sector’s credibility, our trust and narrative of why charities and their supporters receive the exemptions that they do.

At Good2Give we’ve developed a tax calculator for employees to see exactly what they can save by donating before 30 June. We recommend sharing this tool and raising awareness of what your supporters’ donation will cost. But fundamentally, the story goes beyond this. Tax deductible gifts aren’t about loopholes to save earnings. They’re about acknowledging the community impact we have through benevolence. They’re about acknowledging the importance of investing in a thriving and independent charity sector.  

That’s an Australian society and democracy to celebrate! Tax break, yes, but so much more meaning to be found within that. For the donor and for our sector. That’s the narrative we need to reinforce when it comes to the tax deductions our donors receive, and a story I hope you can also include in your own upcoming appeals this June.

Don’t fall into the existing narrative and reduce tax deductions to a boost in one’s bank account. Give your supporters more than that. Give them the why, and we’ll be in a far better place as a sector when push comes to shove next time our tax benefits are prodded and poked.

About the author: Lisa Grinham is the CEO of Good2Give, a not-for-profit organisations that works with companies to encourage corporate philanthropy.