By Aaron Cordy
JUNE sees a spate of donations to charities and not-for-profits (NFP) as people try to give themselves a little tax break before the end of the financial year. The generosity isn’t confined to June, with Australians donating approximately $8B to $9.1B annually in individual tax-deductible and self-reported giving, according to research done by Roy Morgan.
But what is the difference between a charity and a not-for-profit? And where does your money go?
All charities are NFPs, but not all NFP’s are charities. And the difference can mean a big difference in where the money goes.
In Greater Shepparton, there are many wonderful charities and NFPs. Shepparton Foodshare, Primary Care Connect, Shepparton Access, the South Shepparton Community House, St Paul’s African House, the Greater Shepparton Foundation and the Greater Shepparton Lighthouse Project are just a few registered local charities.
The region is equally serviced by great community clubs. From local sporting clubs to the Committee for Greater Shepparton and People Supporting People.
Then there are organisations that border the definition of charity and NFP. The local Rotary clubs do a plethora of charitable work in the community, but they are not technically charities. However, Rotary does have several branches that are registered charities.
Charities need to be registered with the Australian Charities and Not-for-profits Commission; a charity must meet strict legal tests to serve a specific charitable purpose for the public benefit, whereas an NFP does not come under the same scrutiny.
This does not mean that NFP’s are dodgy or that the money doesn’t go where you intended.
However, a recent case of an online influencer scamming the public by taking money for an orphanage that doesn’t exist under the guise of a charity is not new. There have always been people exploiting the generosity and compassion of others for personal gain.
To avoid using your hard-earned money to fund scammers’ overseas trips or investment properties, it is best to understand where the money goes through a personal link to the charity or organisation. For larger charities and even small ones where a personal connection isn’t possible, you can find out if an organisation is a legitimate charity at https://www.acnc.gov.au/charity/charities.
