FRRR donation accounts facilitate the receipt of tax deductible donations. All donations made to FRRR that are tax deductible are deposited into the FRRR Public Fund. For identification purposes, donations within the public fund are accounted for in separate management accounts according to the nature of the donation. Some of these management accounts are known as Donation Accounts for a specific purpose or project. This is a time-limited service determined by the length of the project. After reading about the three donation account types below, please contact us to discuss how we can assist your community or organisation to raise funds.
Why use an FRRR Donation Account?
One of the advantages FRRR enjoys is that it is not bound by some of the legal limitations imposed on other philanthropic bodies e.g. many funds can only give to other DGR or Income Tax Exempt organisations.
Anyone can donate to a donation account, including Prescribed Private Funds. FRRR is covered by Subdivision 30-B of the Income Tax Assessment Act 1997 and is specifically listed as a recipient for deductible gifts under section 30-105.
There are three types of donation accounts:
- Project Donation Account to raise funds for a specific project.
- Regional Donation Account – suitable for Community Foundations or community organisations without a tax deductable public ancillary fund, to raise funds for particular region.
- Small Grants Program Donation Account – to raise funds for small grants program.
Who can apply for a donation account?
Incorporated, Not-for-Profit organisations with constitutions and projects that conform with FRRR’s objects of promoting, for the public benefit, rural and regional renewal, regeneration and development in Australia in social, economic, environment and cultural areas may apply to FRRR for consideration for a Donation Account. Please contact FRRR to discuss your eligibility and access application forms.
How do they operate?
Under an agreement known as a “Memorandum of Understanding”’ FRRR accepts donation account organisations. Funds for the project accumulate in the donation account within the FRRR Public Fund and are then redirected to the organisation for application to the project.
FRRR are not funds managers and Donation Accounts will not be separately invested by FRRR nor will management accounts representing Donation Account capital be separately accounted for in the financial statements of FRRR. Legally, all donations received by FRRR, belong to FRRR for the distribution at the discretion of the FRRR board.
What about the project organisations role?
FRRR currently offers two models:
- Donations are collected by the Organisation overseeing the project. The organisation passes the donations through to FRRR (usually in batches), FRRR raises an official receipt for the donations and returns the receipts via the organisation for distribution to the donors. In this way the project organisation maintains the relationship with the donor.
- FRRR receives the donations directly from the donor and reports back to a donation account advisory committee.
Are there any charges associated with Donation Accounts?
FRRR generally charges a fee of 5% of donations received to help defray the costs associated with:
- Review and approval of the project or organisation as being within FRRR’s objects
- Establishment of a management account within FRRR’s Public Fund
- Review and advise in designing donation forms
- Receipt of tax deductible donations either in cash or by credit card
- Issuing of receipts to the donor
- Distributions on a regular basis
What are Project Specific Donation accounts?
They are the means by which communities can self-help in addressing a specific project or issue within the local area. For example the public hall may need renovating; or there may be a need for an unemployment program; or there may be a number of environmental issues which need addressing.
Where these projects can be initiated, coordinated or conducted by a not-for-profit community group within that community, an FRRR donation account can assist in the fundraising process by providing a tax deductible receptacle for donor funds to the project.
The steps for working with FRRR for support of a specific project or issue are:
1. The community organisation applies to FRRR with its proposed project, outlining:
- How much it seeks to raise over what time frame,
- Details of the project or issue and how it wishes the money to be applied.
The project or issue needs to be charitable and within FRRR’s objects ie to promote rural and regional renewal, regeneration and development in social, economic, environmental and cultural areas.
2. The FRRR Board will consider the application and if it approves the project, an account within the FRRR general ledger system will be set up for the approved project.
3. A memorandum of understanding will be exchanged with the head of the community organisation detailing the terms and conditions of the agreement with FRRR.
The community organisation in consultation with FRRR will then develop its publicity material /donation form. All tax deductible money must be paid directly to FRRR for deposit into the FRRR Public Fund.
Monies raised towards the approved project will initially be held by FRRR until a request is made by the community organisation for the release of funds to the project. Subsequent releases of funds will be subject to adequate reporting having been provided by the community organisation on the expenditure of previous funds releases. FRRR charges a fee to manage a donation account, generally 5% of donations received, up to a maximum of $5,000 per donation.
The Government broadened the scope of the FRRR to allow it to receive tax deductible donations from donors and to use these funds exclusively for projects in particular regions, with effect from 1 July 2007.
This measure allows the FRRR’s funding decisions to reflect the donors’ choice of geographic region, and for donations to be used exclusively for projects in specified regions. FRRR will remain responsible for assessing all community – funded projects against the established FRRR criteria, and for ensuring that funded projects fall within the scope of FRRR purposes.
The measure provides an additional avenue for funding charitable rural and regional community projects within the broad DGR policy framework, which will give certainty to community foundations that local – level fundraising and philanthropic efforts within their communities are guaranteed to benefit their local community.
Community Foundations interested in providing a small grants program in their region in partnership with FRRR can apply to establish a Small Grants Program Regional Donation Account.
This fundraising account can then be used to provide small grants to locally based not for profit community groups in the region that do not have a specific tax status. Many Community Foundations that accept tax deductible donations for their small grants programs, are restricted to only funding charitable institutions or DGR organisations within their region. Establishing a small grants program donation account in partnership with FRRR, increases the diversity of applications and organisations eligible for support.
The small grants program donation account is based on FRRR’s successful Small Grants for Small Rural Communities Program. All grants recommended under the donation account are approved at the discretion of the FRRR Board. Community Foundations wishing to establish a Small Grants Program Donation Account are encouraged to discuss their project with FRRR staff before applying.