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In the last budget, the Federal Government announced it would create a new deductible gift recipient (DGR) category for men and women sheds. There are currently about 1,000 sheds around Australia which have a valuable role in reducing social isolation and improving mental health within our communities.

The government has now released draft legislation to bring this DGR category into effect. You can make submissions on the proposed legislation until 14 February 2020.

To be eligible for DGR endorsement, it is proposed the Shed will need to satisfy the following criteria:

Registered Charitable Institution
The Shed must be a public institution that is registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC).

Mental Health and Social Isolation
Sheds undertake a range of activities, such as sharing hobbies and interests, or participating in community projects. However, the dominant purposes in undertaking these activities must be advancing mental health and preventing or relieving social isolation. The Shed would usually provide a welcoming environment for the community and assist social connections between members. The Shed does not need to provide professional mental health services, but would generally provide or enable members to access information regarding mental health.

Physical Location
The Shed must provide a physical location. However, that location does not need to be permanent and it does not need to be a building. The Shed can meet at an outdoors location. The organisation must support and encourage the use of the location through projects, hobbies and other activities.

There must be either no membership criteria or membership criteria that only relate to an individual’s sex or Indigenous heritage.

Obtaining DGR Endorsement
The DGR category will commence on 1 July 2020. DGR status will greatly assist Men’s and Women’s Shed in obtaining ongoing and sustainable funding to grow and carry out their activities. DGR status not only means that donations to Sheds will be tax deductible to the donor but it also means that Sheds can seek grants from public and private ancillary funds. Ancillary funds are only permitted to give grants to DGRs.

In order to obtain DGR status, the Shed must first be a registered charity. If your organisation is not currently registered with the ACNC, we recommend you seek registration now so that you will be able to obtain DGR endorsement from 1 July. In order to be registered, the organisation will need to meet various requirements, including having some form of constituent document and being able to show it is a not-for-profit entity.

If you are already registered with the ACNC, you should review your constituent document to ensure it meets the requirement for DGR endorsement. This will include an appropriate purpose statement, not-for-profit clauses and DGR clauses.

Saward Dawson has considerable experience in working with organisations to become registered charities with DGR status. We would be pleased to assist your Shed in becoming a registered charity and obtaining DGR endorsement. Please contact us to discuss the action your Shed should take to be a DGR from 1 July 2020.

Joshua Morse

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We happily spend 30 minutes without charge with new contacts to explore relevant issues and outline how we can assist. Let us know your area of interest and we will arrange a specialist to meet with you.

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