Fixing Australian Philanthropy: Why DGR Reform Matters

Recorded live in Melbourne in March 2025, this event — co-hosted with Effective Altruism Australia — brings together three speakers making the case for reforming our charitable giving laws.

Ryan Ginard (Fundraise for Australia) argues that without fixing the infrastructure, the $5.4 trillion intergenerational wealth transfer will pass the charitable sector by. 

Clare Ozich (Justice Connect) explains exactly what the system is, why it fails, and what the Productivity Commission's solution would do. 

Grace Adams (Effective Altruism Australia) shows how DGR rules actively distort giving away from some of the most important causes of our time. 

Myriam Robin of the Australian Financial Review moderates the panel.

Read Ryan Ginard's essay “The Generous Country” in Inflection Points: https://inflectionpoints.work/articles/the-generous-country

Support Justice Connect’s Unlock DGR campaign: https://justiceconnect.org.au/campaigns/unlock-dgr/ 

Transcript

SPEAKER_04 0:10

In 2017, an organization that started in Melbourne won the Nobel Peace Prize for its work toward a global ban on nuclear weapons. Seven years later, in 2024, it finally became tax deductible in Australia. This is not a bureaucratic accident. It's a system working exactly as designed. Today, we're going to unpack that. I'm Jonathan O'Brien, editor-in-chief at Inflection Points, and welcome to the Inflection Points podcast. Today's episode is a recording of a live event we hosted in Melbourne in February of this year, in collaboration with Effective Altruism Australia. The event was called Fixing Australian Philanthropy: Why DGR Reform Matters. If you don't know what DGR is, here's the short version. When you donate to charity and claim it on your tax return, that's only possible because the charity holds deductible gift recipient status, DGR. This is an endorsement from the tax office, and it matters a great deal because private giving funds, which in Australia hold around$11 billion, they can only distribute to DGR organizations. Many government grants require DGR status, and donors, just as a matter of human psychology, just give more when a donation is tax deductible. Less than half of Australia's registered charities have this status. That's not because they're doing anything wrong. It's because DGR eligibility is currently governed by 52 narrow categories. And these categories have accumulated in the Tax Act over decades, with no real coherent logic behind them. Neighborhood centers helping 400,000 Australians a week, mostly locked out. Organizations building climate resilience, working to improve conditions for livestock, or working on hard multi-part social problems. All these organizations are typically locked out of DGR. But some organizations that happen to fit a legacy category from a different era of Australian public life, organizations like private school building funds, marriage guidance organizations, religious education in state schools, these categories are in the DGR bubble. But organizations working on something like First Nations reconciliation, often those topics are too complicated to fit into DGR. The government's own productivity commission reviewed this system and found it not fit for purpose. They recommended fixes relatively straightforward. Extend DGR eligibility to the vast majority of registered charities based on clear principles rather than an arbitrary list. This same government, the same government that commissioned that report, has committed to doubling philanthropy by 2030. But this simply will not happen unless we reform DGR. We have three speakers tonight: Ryan Gennard, Claire Ozic, and Grace Adams. After the speeches, Miriam Robin of the Australian Financial Review moderates a panel that gets into the harder questions. One disclosure before we start. So I have skin in the game here. I think this is a reform that really matters. And I hope by the end of this episode you agree. Now, up first is Ryan Jannard, the head of sector development and innovation at Minderoo Foundation and author in a personal capacity of the Inflection Points essay The Generous Country, out now as part of issue four. He makes the case that our nation must stop squandering our wealth and soon, or else we'll miss the window on a$5.4 trillion intergenerational wealth transfer. Now, to begin, here is Ryan Janan.

SPEAKER_05 4:04

Look, this has to happen, and this has to happen now. I mean, I want to frame it like that because this should be a no-brainer. This was the number one reform out of both the Productivity Commission, which was billed as a once-in-a-generation report. It was the number one recommendation in the not-for-profit blueprint that was again commissioned by the government. We we need to realize that we all are part of this solution. And I think we inside needs to exercise in that power as well. So the two things I really want to frame here, we can talk about the$5.4 trillion. Like, I mean, that just got the government to the table. Like the reality is double giving, what does it mean? Like, is it building a culture of generosity in Australia? Is it just doubling giving? Because that's a binary um approach that, you know, any if we really linked arms and ticked that box, fantastic. But where's the sustainability in that? And you can't have sustainability if you're working on outdated systems. So my key themes here, um, and one I'd love to expand a bit more when we um get to sit down and have a much more relaxed chat. I did frame it that I get a bit ranty when I'm at a podium and a bit more relaxed that way. But if we can't see it, we can't fund it. That's one big reality that I don't think um we're looking at at this campaign. It's a it's a simple process. And the second one is this is a this is a conversation about the tomorrow. We're talking about double giving by 2030, right? So that is the future. We know what the tools we have, we know that uh funds are going to be coming down, even if we don't increase um the funding that comes in, money's still coming in to the the community sector, and sadly that we'll live on uh through this scarcity loop, which is really holding us back in our impact. But the reality is if we don't fix DGR, we'll keep on funneling the funds of tomorrow into yesterday's categories. And when I talk about yesterday's categories, it's what we see now. DGR is not broken. It's not broken, it's just not fit for purpose at the moment. Uh, we're going through a polycrisis, we're we're understanding the intersectional nature of the work we do, and we're starting to see organizations come up that are filling the gaps. My background uh is in US philanthropy. I was there for 13 years, kind of ran the gamut, worked for a community foundation, worked for um like a chamber of commerce for funders, worked for people of the giving pledge, noting that I still work for someone that's on the giving pledge as well, and also university institutions that really are pushing new research, everything that we want, all the good we see from philanthropy. So, in regards to that, they have like a world-class system. Like, I mean, they have these NTE, don't ask me what the acronym is, they have uh this world-class taxonomy where you can literally go through and pull reports on say if you wanted to fund museums. I wrote down the codes because I don't want to get kind of fact-checked. If you wanted to fund children's museums, you'd kind of uh click in A52. And if you wanted to do um, you know, natural history museums, it'd be A56. There's like literally 50 codes for every single uh discipline in uh museums. And imagine if you're a funder and you like your passion was uh kind of early education, you wanted to fund children's music, you could pull that and who's uh getting funds and you could fund them here. I mean you can't even uh fund neighborhood uh centres, which is wild. And we've shown that we can do it. Like that's the thing. This is what is very perplexing. With that, we actually uh introduced a new DGR category, and we've seen the benefits of doing that. Um the community charities uh designation um for community foundations in Australia, flicking that switch has brought in around 80 new community foundations to Australia. And it's a time when we need it the most. Like there's no community control capital in Australia. And if we're moving to hyper-local, place-based philanthropy, things that neighborhood centres espouse the values of, we need to start fixing this very outdated system. We've seen it's it's worked. And uh, we did an advocacy campaign with Community Foundations Australia, and there's going to be an announcement soon with the next kind of tranche of um community foundations in Australia, and that is a growing industry now. And it's representative of the community, it's representative of the people that they represent, and it's not a traditional form of philanthropy. I think if we stop looking at what philanthropy is through, again, a transactional nature and realise it is whatever we want it to be, um, you know, you can do that in place. So DGR reform, we need to we need to do it because we need to get to the start line. And that kind of goes into all the money that's apparently coming down with the$5.4 trillion intergeneration wealth transfer. Who believes$5.4 trillion is coming to the community sector? It's not. It's it's it's it's a make-believe number. Like the reality is that$5.4 trillion has actually been holding us back from moving forward because we don't know what the size of the prize is. It's something that is um, you know, when something's just too big, you just can't meet those expectations. That's what that number's doing. It literally is holding us back. And we think that that is going to be what happens organically and what will double giving. The reality is double giving, uh, giving in Australia has stagnated. We saw it had a$5 billion increase last year, but that was through the generosity of Andrew and Nicola Forrest. If they didn't give that$5 billion gift, we would be going backwards. So even if we uh planned to double giving and it would happen organically, um, which I think probably was the modeling that um you know projected that, it's it's not going to happen uh without this quite simply easy reform. There's been a number of reports done over the past 30 years, like a number, and I'm also including anything that's mentioned philanthropy, and that includes the Henry Tax review. Of the 120 or so uh recommendations that have been in those reports, anyone has it a guess how many of those recommendations have been adopted? These are government reports, like they've been asking for the recommendations so they can make improvements to the sector. It's 13%. And if we look at the Productivity Commission report right now, what has been adopted? We're changing NCRE funds name to giving funds. I look this not supposed to be humorous, it's kind of uh this is a pertinent point. Um but um and also getting rid of the$2 minimum deduction. Like these aren't transformative, like they they again they're adopting things. I get it, let's move 13% up to 13.5%. All good. But DGR reform is the number one for that, and I think that that really needs to be heeded. I think we um, you know, the government really needs to get out into the communities, and if they don't, we need to go to them. Like that's the next stage of this campaign. We know what to do. It it's a very simple equation, but we're gonna have to link arms now. I know DGR reform is not sexy, it's it's not. And like, are you willing to die on a hill for DGR reform? No. But are you willing to you know lend a hand for your neighbour um when your town floods? Yeah, you are. I don't think we uh obviously there's a big kind of difference with uh natural disasters and DGR reform. I'm not trying to link that. But I'm just saying we can do this. We can do this for the other organizations that are fighting for people that are falling through the cracks. We can link arms and help the community centre that uh helps people uh stay off the streets and gives people a place to belong when uh sometimes they may feel lost. Like Australia is, you know, we pride ourselves on mateship, right? We need DGR to move beyond that, to help us move beyond that. So we actually uh see Australia as the generous country. That's my pitch for DGR reform. It's that we're not ready to accept these uh billions of dollars that are going to flow in. If we start like investing in the sector, uh we can realise that uh percentage of funds that will come with that intergenerational wealth transfer will make better us on behalf of our community, we'll make better us um you know on behalf of our neighbours, and we'll see a more vibrant um you know Australia as a result. So going back to again not being able to fund what you can't see, there's so many gaps in the social sector, and that's why we're always you know running on the um fumes of an oily rag, right? That's why we are in this kind of scarcity mindset. I think we need to really just frame, reframe stuff, going that okay, we can expand the pie, but only we can double giving. The government's not doing it for us. They've literally put the bat signal out there saying, look, we'll do it, but like you need to meet us halfway kind of thing. So I think we can meet them more than halfway. I think that we can meet them on the steps of parliament, to be fair, and make the case uh to um you know adopt DGR reform and not just do band-aid approaches, not just to have another couple of categories. Like we need to reset the whole thing because if we're doing a once-in-a-generation kind of reform, like it has to be fit for purpose for the next 10 years, the next 20 years. Because again, all the organizations that are just on the periphery of DGR that are doing amazing things, if they don't get it, what about that person that you know really benefited from their services, left a bequest in their estate of a million dollars and it can't go to them because they don't have DGR? Like that's uh and then we kind of see all the issues with probate as well. Like, if if you can't give that million dollars to that organization, then the family's gonna come after it and it's not gonna even get into the community. So there's so many things. So when I say if we can't see it, we can't fund it, it goes more broader. Like DGR is just you know the baseline. So this gets us to the start line. We need to start investing in the sector because you know, it makes a difference. It really makes a difference. Like tax return time when a lot of the money's secured, right? We we have this mad rush uh for uh tax appeals. Everyone here um sits across from a tax agent, an accountant every year, right? You have to do your tax returns. What's your occupation in that? No one uh there's no classification for not-for-profit staffer, there's no fundraiser one. Like everyone puts like consultant other or manager or something that just kind of fits that, but just because it supports the fringe benefit tax structure. We need a massive overhaul here, because again, if we can't see it, we can't invest in it. So DGR is just one of those uh kind of planks. It's like Maslow's hierarchy of needs for not for profits. Like that bottom level is literally DGR, and then we'll keep on progressing as we expand the pie, as we're fit for purpose, as we're able to you know source those important donations, as we're able to steward it as a result of that. Like it's a very simple proposition. And the funny thing is, it's the government reports that put this on the table. That's that's the reality. So uh again, we need to start realizing we have power here. And just because they can't see us, just because uh you know the ATO and the ABS and all that data doesn't connect with the ACNC, doesn't mean that we don't have 10% of the Australian workforce, right? The sooner we wake up as a sector and start forcing a lot of this change, which is not kind of aggressive, it's not like we're asking for full-scale tax reform or kind of uh looking at new giving vehicles. This is just so there's another 30,000 organizations in Australia that are doing amazing work and they can actually source the donations to keep them doing that work. And you know, maybe actually, you know, have a bit in the tank so when times are lean, they can still help those people that uh need them the most. So um my argument really is just do it.

SPEAKER_04 16:30

Ryan Gennard from Minderu. If the argument you just heard lands that the sector can't capture the generosity that's coming without fixing the infrastructure first, then what you need next is a precise account of what's actually broken and what fixing it would look like. That's Claire Osich's territory. She's campaign manager for not-for-profit law at Justice Connect, and she runs the Unlock DGR campaign. Here is Claire Osic.

SPEAKER_01 16:59

First, I'd like to acknowledge that we're meeting today on the lands of the Rowanji people of the Kulin Nation and pay my respects to elders past and present and to any First Nations people in the audience. And I think I'd also want to acknowledge that one of the things we're talking about today is how people in our community come together to care for themselves and to care for this country, and that the First Nations people of this land have been doing that for a millennia, and often in the face of hostile governments rather than with government support. So, yeah, I'm gonna talk through what DGR is, uh what the problem is, and what the solution is. I do feel I have to mention uh straight up that I am not actually a lawyer, but I do work with a bunch of really amazing lawyers at Justice Connect's not-for-profit law program. Uh, and if you do have any uh need for advice about any of the issues that get raised today, feel free to contact Justice Connect. So, what even is this thing called deductible gift recipient status and why does it matter? So basically, it's an endorsement from the tax office that allows people who donate to organizations that have this endorsement to claim that donation as a tax deduction. So it's essentially an incentive for giving. But it's also a gatekeeper to a lot of philanthropic funding and government grants. So, for example, private ancillary funds, so private uh giving funds, can only distribute their funds to DGR organizations. And there's currently around eleven billion dollars in these funds. So DGR is essentially a form of government support for a select group within the charitable sector in the form of a tax concession. And I say select group because less than half of Australia's registered charities have DGR endorsement. So what do you have to do to get DGR endorsement as a charity? Well, you need, it's a, as I said, it's an endorsement from the tax office, and you need to fit within one of the 52 narrow and exclusive categories in the Income Tax Assessment Act. And each of these categories have their own rules and their own conditions. A couple of the sort of big main DGR categories are public benevolent institutions and health promotion charities, but other categories include environmental organizations, cultural organizations, disaster relief funds, religious education in schools, marriage counselling. It's a it's a heady mix. If your charity, the work of your charity, doesn't fit within one of these categories, there are a couple of other options for you. One is the listing process, and that's where your organization specifically gets named in the Tax Act as a uh as a DGR entity. This is a time-consuming process, it's a political process, you basically just have to lobby the government of the day to get yourself uh on that list. There's no transparency around that process, and what's more, it's now vulnerable to change. So the government's starting to put five-year term limits on uh specifically listed uh organizations in the tax act. So you get your listing under one government, the government changes, you can you can you could lose your listing. So it's time consuming, it's not transparent. The other option is auspicing. So that's where a DGR organization might auspice a non-DGR organization, often for the uh specific grant or a specific um amount of funding um that has to go to a DGR organization. Now these auspicing arrangements can work really well, but they're also time consuming, they're complex, they take up uh resources, the auspicing organization will often take uh a percentage of the grant, and there's a risk because the auspicing organization is responsible for making sure that the money is being used for their DGR endorsement. So that's what we're talking about in terms of what the DGR system is. So what's wrong with it? Well, the Productivity Commission did their inquiry into philanthropy a couple of years ago, and they found that the DGR system is not fit for purpose, that it's poorly designed, overly complex, and has no coherent policy rationale, and that this creates inefficient, inconsistent, and unfair outcomes for charities, donors, and the community. Basically, this system isn't working for anyone. Now, if we break that down a little bit more, we've got outdated and overcomplicated. So this these 52 categories, as the Productivity Commission said, there's no coherent policy rationale. They've been developed over time in an ad hoc manner. They have their own set of rules that are difficult to navigate, it's very complex. It basically creates a lot of work for lawyers. You know, one of the reasons that Justice Connect is taking this work on is because my colleagues at Justice Connect spent a lot of their time advising organizations on DGR status. It's a work program for lawyers. One of the other consequences of that is that it's locking out a lot of Australia's smaller charities. The time, the effort that it takes means that a lot of smaller charities just can't do the work to access DGR. And it's just, it's deeply frustrating. The other point I want to make, and I think this is a really important one, is that the categories are too rigid for the work of modern charities. The system forces organizations into these narrow categories, and that disadvantages organizations that are wanting to work across multiple causes or tackle complex community issues. And this is like a real problem for the way that our societies and our society's problems are moving so fast. We see a lot of youth organizations, for example, that do, that work across issues because they're that's that's the best way of engaging with their people that they're wanting to support. But it's often going to be really hard to get DGR when you're doing that. So it's a real barrier to taking multifaceted approaches to the problems that we're facing, and it's a barrier to innovation for the same reason. It's also a system that's out of step with today's values, and I'll I'll talk in a minute about some examples that will show that. In the last few months, I've had the real privilege of speaking to a wide range of people working across a diverse array of charities, doing a lot of amazing work in our community, many of whom have tried and failed to get DGR. And the frustration out there, it's palpable. There's there's you know, there's a lot of frustration out there. And here's just some examples of some of the work out there that's missing out on DGR. One of the ones we're using a lot in our campaign, a neighborhood houses, they provide a range of services and support to the local communities. They're embedded in their communities and they're responding to the needs of their communities. And they provide a lot of different services and support from food relief to social connection programs to assistance in navigating Centrelink or the NDIS to adult education programs. In regional communities, they often become the hub for disaster relief. Around 400,000 people walk through the doors of one of the neighbourhood houses in Australia every week. Some of them have managed to receive DGR status, but most haven't. And the reason that most of them can't is the very diversity of the services and support they offer. They basically do too much. So here we have an organization embedded in their community responding to the needs of their community, but they can't get DGR because they do too much. It makes no sense. A few other examples. A charity that seeks to help communities build resilience and preparedness in the face of the climate crisis is locked out of DGR. The charities that come through after the bush fire or the flood and helping communities pick up the pieces rightly have DGR, but the organizations wanting to do work beforehand can't get access to DGR. At a time when, as a society, we're facing increasing social division, the DGR system is failing to support the majority of charities engaged in this work. The Productivity Commission found that in the charitable subtypes of promoting reconciliation, mutual respect and tolerance, and promoting human rights, there was proportionally a very low number of charities with DGR. And this, I should point out, includes organizations promoting First Nations reconciliation with the public. The system as it currently is absurd. Those are a few more examples. I'm sure we'll be hearing more as we go along. So what's the solution? The good news is there is a relatively simple solution to this mess. The Productivity Commission recommended in its report a principled-based approach to solving this problem and it identified three key principles. One, that there's rationale for government support, that the activity will have a community benefit. Two, that there's a net benefit from the government providing that support through supporting philanthropy. And three, that the activity is unlikely to create a material risk that the donation can be converted into private benefit. And when the Productivity Commission applied these principles to the Australian charitable sector, it concluded that the majority of Australian charities would be eligible for DGR. They did say that in applying those principles, there should be some charitable activities excluded. The two main exclusions were activities for the sole purpose of promoting religion and primary and secondary schools. But the net result of implementing the recommendations of the Productivity Commission is that most charities would get DGR status by virtue of their charitable registration. And this recommendation, I should also mention, echoes earlier recommendations. So this issue has been around for a long time. In 2013, the Not-for-Profit Tax Working Group brought down a report that made very similar recommendations. And this would bring Australia in line with similar jurisdictions as well. So, what are the benefits of the reform? Well, basically, it would be providing a much broader range of charities with the capacity to have more financial resilience. It would be unlocking, really importantly, unlocking that philanthropic money to be able to go to a much broader range of charitable work. And basically, it would be a way for the government to be better supporting the work of the broader charitable sector. So we're two from here. So Justice Connect is running a campaign, Unlock DGR. Us uh and along with others, including Minderw, who are supporting our campaign, are wanting to see the government act on this reform. We've got the evidence base with the Productivity Commission report. We know we've got broad sector support because the not-for-profit sector development blueprint, which was sort of like a map for the sector for the next 10 years, also calls for DGR reform. We've also got a government that has committed to doubling philanthropy by 2030. That's not something that can happen unless they enact DGR reform. So, really, now is the time for this reform to happen. All the pieces are coming together, and what we need to do is apply a bit of pressure on the government to get them to actually act, which is what our campaign is looking to do, and I can talk in a little bit more detail about that later. But I would just say to finish that it is time for the government to back the charitable sector who've been grappling with increased demand for their services in the face of the cost of living crisis, rolling climate fuel disasters and funding constraints, and extending eligibility for DGR status to most charities would unlock much-needed financial support and ensure a much more resilient charitable sector.

SPEAKER_04 28:36

That was Claire Izich from Justice Connect. Our final speaker comes at the same problem from a different direction. Grace Adams leads Effective Altruism Australia, an organization built on the question of where your giving can do the most good. And she gives us some pointed examples of how the current system gets the answer to that question wrong. Badly. Here is Grace Adams.

SPEAKER_00 29:01

So, uh thank you all for being here and for caring about how to make Australia's generosity actually count. Australia is a remarkably generous country. Every year there are billions of dollars that are donated to charities that Australians believe will genuinely make life better. But as we've seen tonight, there is an uncomfortable truth here. The rules that govern where those tax-deductible donations go often have very little to do with impact and a great deal to do with history, politics, and arbitrary categories. Because of that, we are leaving a huge amount of impact on the table. I'm speaking tonight from the perspective of Effective Altism Australia. And more importantly, our more than 7,000 donors and community members who want their giving to do as much good as possible, both here and globally. For those of you who aren't familiar with the concept of effective altruism, it's both a philosophical and practical project of figuring out how to do the most good we can and trying to direct additional resources to the causes and projects that can have the biggest marginal impact on the world. And that means that our community isn't thinking about how to do good using a narrow set of rules defined in tax law. Instead, they're asking things like where can we prevent the most suffering? And where does an additional dollar genuinely change outcomes at scale? They're thinking really, really hard about how to have the biggest impact possible with their charitable giving, but also with their time. And far too often the current DGR framework is getting in their way. Adopting the Productivity Commission's very, very sensible and straightforward reforms would remove this barrier for impact-focused donors and for donors across Australia. So I have a couple of case studies that I wanted to talk through tonight. First, I wanted to start with catastrophic and existential risks. Just a few weeks ago, the bulletin for the atomic scientist members set their famous doomsday clock to just 85 seconds to midnight. We're the closest that we've ever been to an existential crisis for humanity and for the planet. These risks are becoming more widely acknowledged and are a major source of anxiety in today's younger generations. Australians are increasingly concerned about preventing the kinds of risks and disasters that could harm huge numbers of people. Things like nuclear escalation, pandemics, poorly controlled AI, or extreme climate scenarios. There are organizations like the International Campaign to Abolish Nuclear Weapons, known as ICANN, which literally helped push forward a global treaty to ban nuclear weapons. They started here in Melbourne. And they exist to reduce these kinds of risks. Their work is both profoundly preventative and public-minded. And they even won a Nobel Peace Prize for their work. But for many, many years, their important and essential advocacy work wasn't tax deductible. They in fact only secured their tax deductible status through the bespoke listing process that Claire spoke about earlier in 2024, which was seven years after they received the Nobel Peace Prize for their work. Australia's charities shouldn't have to wait seven years after winning a Nobel Peace Prize before they can become tax deductible. I think we can all agree that that's an exceptional example of how the current laws aren't aligned with impact. And so similar organizations that are focused on preventing existential risks through both local and international advocacy either have to go through these long, expensive and bespoke legal, bespoke listing processes that require political lobbying, or they actually just have no viable path to DGR status at all. Meanwhile, other organizations that have far less systemic impact receive tax-deductible status almost automatically because they happen to fit into these legacy categories. This doesn't reflect public values, but more importantly, it actually just doesn't reflect the risk to our nation or to our global community. If there is even a small chance of a catastrophe that harms millions or even billions of people, work that meaningfully reduces that risk is among some of the most valuable public goods that we have, and our tax system and our laws should not be structurally biased against it. And we also see that same kind of distortion appearing in animal welfare. Australians overwhelmingly care about how animals are treated. And understandably, organizations like pet shelters and rescue organizations have tax-deductible status. They're providing direct and visible help to animals, which is a wonderful thing. But the organizations that are working upstream in advocacy, those that are trying to prevent improve laws, standards, and industry practices so that millions of animals are treated more humanely, often can't access DGR. So the system is saying that if you want to help one animal at a time, that's okay and that's tax deductible. But if you're trying to do the work to reduce suffering for millions, that that's not tax deductible. In my view, that is not a coherent policy position. It's the byproduct of an outdated framework that rewards what's easiest to label rather than what is actually reducing suffering most effectively. Groups like the Australian Alliance for Animals and Animals Australia are doing careful and pragmatic policy work. They're trying to align our laws with what the public already believes. The unnecessary suffering for animals should be reduced. Yet they're facing a structurally harder fundraising environment than a small shelter down the road, not because they're less impactful, but because our system doesn't currently recognize advocacy for charitable intent as tax deductible. And I think this is really well demonstrated through the fact that, as we've spoken about tonight, animal welfare charities without DGR status are excluded from the hundreds of millions of dollars that are given every year to Australian charities through these private ancillary funds, also known as giving funds. In order to receive that money, you need to have tax-deductible status. And many of these charities can't access it. But now I want to bring this just a little bit closer to home. At Effective Altruism Australia, the organization that I'm really fortunate to lead, most of our time has historically been spent helping donors to support global health and poverty interventions with extremely strong evidence of impact and cost effectiveness. Things like malaria, vitamin A supplementation, but also direct cash transfers, among other things. But as you might have guessed, our donors also care about many other things. They care about climate change, they care about animal welfare, they care about existential risks. And so they want to do good across the causes where they can have the biggest impact, not just being boxed into one. But under the current rules, I mean, we we can't provide uh the kind of funding we would like to farm animal welfare and to existential risks because those are just not tax deductible at all. But the only way that we could prov responsibly provide climate-related giving was to set up an entirely separate environmental charity. So today, with a staff of uh less than the equivalent of four full-time employees, we operate two separate legal entities, which is two audits, two compliance pathways, duplicated governments and duplicated reporting. And none of that is purpose-driven, that's entirely driven through the DGR system. And that administrative burden for us is really real. It means that we have to spend more time fundraising just to cover our compliance overhead. It's more time spent maintaining structures rather than creating impact. And it's more confusion from our donors about why the landscape is so fragmented. I constantly have to field queries from people saying, why can't I give to this area? And I have to tell them it's not allowed in Australia. We actually can't support that tax deductively. You're asking something I can't support. And that's incredibly frustrating when what we know that people want to donate, they want to give to these causes, and they're being turned away by outdated laws. This is the opposite of what a rational system should be incentivizing. And I frequently speak to charity leaders overseas, as Ryan alluded to, who are really surprised at the the fact that their work wouldn't be considered tax deductible in Australia. They generally think of Australia as a progressive country, but on this issue, we are lagging far behind our peers. If we adopt these reforms, we're shifting away from a system that rewards what fits these administrative boxes towards one that increasingly benefits Australians and the wider world that they live in. Concretely, it would mean that preventing catastrophic risks becomes much more fundable. Animal welfare improvements can be pursued at scale. Charities will stop being having to multiply their structures just to satisfy technicalities, and donors will get more choice over the kinds of impact they want to create, which will unlock more giving because we know that donors seek a tax deduction when they're giving. I'm hearing it from people all the time. I'm sure many of you have thought twice about giving to something because it wasn't tax deductible. These reforms will unlock further giving. And so Australians aren't asking for a free-for-all. We're just asking for a system that lets our generosity meet the problems that we believe matter most for our country and for the world at large. Adopting the Productivity Commission's recommendations is the critical next step. This is where you, as citizens and organizations and people who care about making an impact, come in. We need your voice to ensure that these reforms are adopted and implemented correctly. It would make philanthropy more rational, it would make it more future focused, and ultimately it would make it more impactful. And I'm looking forward to discussing further with all of our panelists in a moment. Thank you.

SPEAKER_04 40:51

And now to the panel.

SPEAKER_03 41:30

Why do we have this system at all?

SPEAKER_01 41:32

Personally, I have some sympathy for the view that, you know, governments should be providing the circumstances to ensure that everyone can live a good life, that they should be addressing the multiple problems that we're facing here in Australia and around the world. But firstly, governments aren't actually doing that at the moment. In fact, unfortunately, the history of our governments over the last 30 years, we've seen them sort of exacerbate a bunch of those problems that we're now sort of facing. But secondly, and I think more importantly, the charitable sector is actually very diverse. It's on the ground, it's in local communities, it's often identifying problems arising well before the government is, it has a capacity for creativity and for innovation in terms of addressing those problems. So it actually is doing things that governments can't. And you know, we've we've now got this situation built up over a number of years where there is a bunch of wealth out there, and it's good that it's being captured in philanthropy, and it's good that there's a move that that wealth is being able to, you know, be shared out to the to the charitable sector. And you know, what we're what we're talking about here is that more of the of the sector, more, more charitable activities should be able to have access to that money, to those funds, to do good things.

SPEAKER_00 42:51

Yeah, one of the things that I think is really exciting about the opportunity philanthropy and why money it gets given tax deductibility is because the charitable sector can respond in innovative ways and can have a much larger risk appetite for actually trying out new things, um, exploring solutions that the government just wouldn't have the appetite to actually fund. So one of I think the greatest case studies of philanthropy in the US, and I think it speaks to what philanthropy could achieve, is the research for the contraceptive pill was funded through philanthropic funding. And so I think it's been at a time where this was a really controversial topic. This was something that might not have happened through government funding, through funding from other sources. And that philanthropic capital has enabled so much autonomy over women's bodies and women's health. And I think that's a really exceptional example of the kinds of things that philanthropic funding can unlock. And then actually goes back to then provide a benefit for the government as well in terms of improved health outcomes, but might not have been the kinds of things that would have been funded in the past. So that uh yeah appetite for innovation and risk is something I think is exceptionally powerful about the philanthropic sector.

SPEAKER_05 44:20

Isn't anyone uh everyone here just sick of these tropes? You know, giving it's just a tax dodge. You know, uh you don't have the impact. What like you shouldn't exist as a government. Like we're all mission-driven people, like we're all motivated for our organizations to put themselves out of business, right? So we do it. Like we want to see no homelessness, we don't want to see people in poverty. So again, we I think we need to start shifting the narrative to the positive, and one again from scarcity to abundance. So I think this is uh it's an Australian cultural thing that just needs to change. Like being uh in the US first it's a different culture. Like, I'm not saying Australia is not 10 years behind, it is it Australia is where it is, but we've got a real opportunity to reshape the narrative of how we do the work, and you know, again, it's just these little things that aren't symbolic, they're structural and they help us grow. You know, I'd love to again see DGR in there so we can get more uh donations in and we can put ourselves out of business. Simple, right?

SPEAKER_03 45:20

Sure, sure. You mentioned Grace, you know, Australians are generous, they give huge amounts of money. I feel like we we cover philanthropy all the time at the Financial Review, and there is always a slant to the stories like, you know, it is hoped that this will unlock more wealthy people giving away money. So, you know, if we're constantly trying to unlock philanthropy, is Australia actually generous? Do you think that there is the philanthropic dollar there for the taking? Is this the kind of thing that's holding it back? Or are Australians just, do we just not have this culture?

SPEAKER_00 45:49

I think that's a great question. My sense is that a lot of the cause areas that have been highlighted tonight are things that people want to give to and that people often avoid giving to because they don't have that tax deductibility status. I think I would be giving more money to different causes over and above what I already give. If there were things, more causes that were tax deductible. I would be giving more in animal welfare, I would be giving more towards existential risks because they would become tax deductible. And, you know, I don't think this is perfect reasoning, right? This is like, you know, I should be giving money to these organizations regardless of their tax deductible status. But, you know, human psychology just does play a role in what people actually do, and I think that's the sad thing that unfortunately I am motivated by those tax incentives to some extent. You know, hopefully other people in the audience um, you know, is silently nodding along with me so I'm not outing myself as a terrible person. Um, but I think that is something that many people can um identify with. And I think that we can also like start to build that culture more. As Ryan said, I think this is like a building block for us to start from. When more causes become tax deductible, I hope that that will bring more people in and inspire more people to become invested in the sector.

SPEAKER_05 47:13

Look, it's uh it's not all just about DGR, it's it's about again the sector more broadly. Again, this is a building block. When we released the Unlocking Generosity report, it called for more investment into fundraisers, it called for more investment into philanthropic education around tax agents, accountants, etc. This is just about giving more broadly. This is about again moving into what we see a modern Australia being. Like again, we that misnomer that we're the lucky country. Like we all know the origins, and it was a book kind of talking about the irony that we we're lucky because we're trying to we're squandering all the resources we've had. So, how do we kind of move from again the lucky country to the generous country? And again, it's just a narrative shift. Like, we need some narrative therapy for the work here. So it's not just about DGR. This is uh this is a much more broader conversation on what the social sector looks like in Australia and how it helps uh folks out of all the things that we've mentioned, out of homelessness, out of poverty. So, yeah, we we just need to again start making better arse, like uh you know, you give more, and it's not just the uh being able to give tax deductible, it's like you give more if you were asked. Like it's the five T's of giving, right? It's like time, talent, treasure, ties, testimony. All those are acts of philanthropy, and it builds that civic muscle. So giving$10 to your friend for Movember, like that's an act of philanthropy, that's an act of generosity. These are the things that should be reflective of the Australian um uh Australia we want to see. So yeah, DGR is just a tool in the toolbox, um, but you know, the um it's uh if you're you need tools to build stuff, right? So um, you know, how do we uh build a more generous Australia?

SPEAKER_03 49:07

Yeah. A couple of you have touched on the fact that this isn't really radical, it's not um it's not a huge ask, it wouldn't be that complicated. But it also seems like this has been around as an idea for a very long time. So why isn't it happening already? What are the blockers?

SPEAKER_01 49:24

Very good question. Well, it's as Ryan's pointed out, I mean the government commissioned the report that then recommended uh these changes. Look, I think that so I mean I think firstly we haven't had an official response by from the government to the Productivity Commission report in respect of the DGR recommendations, except for ruling out that school building funds um should lose their DGR. They were very quick off the mark on that, but two years later we still don't have um an official response um to the recommendations around DGR. You know, the government says they're kind of in principle kind of supportive. I I think the problem is that governments don't tend to act unless they kind of have to, unless they're pushed to, and which is why we're running the campaign. So, you know, you know, as Ryan pointed out, there's a lot of reports who have gone to government on on tax reform over the years, and very few have been acted on. Um and what's you know, what's needed is governments need a reason to act over and above this is a really good idea, and your commissioned report said you should do it. They need they need pressure, they need political pressure, and that's that's why we're running the campaign. That's why we're wanting to activate the the sector, the the folks that don't have DGR, the charities that do have DGR, the philanthropists, uh, to put that pressure on the government so they they will act. You know, one of the reasons it kind of gets put forward is that it will have a budgetary cost. So, you know, if we are encouraging more giving through this reform, then there will be uh a greater tax concession in the budget. But I guess the main thing I'd say to that is the government has their goal of doubling philanthropy by 2030. That in itself will have a cost. And that and the DGR reform is but a subset of that of that that bigger kind of budgetary cost. So I don't really buy the uh the cost argument. I think it's I think it's one of the things that government says when they're a bit stuck, they're a bit paralysed, and it's our job to get them moving and to get them to act.

SPEAKER_00 51:29

Yeah, I'd like to think that maybe that that actual tax concession um and uh overall kind of effect might be less than we would think. Uh partly because, you know, I think there'll be much less time spent on administering what counts as uh a DGR charity, and charities themselves will become more efficient. The government is some one of the biggest funders of most charities, or not most charities, but is a large funder of the philanthropic sector itself. And if charities are spending much less time on having to sort out what is and isn't tax deductible, how to sort themselves around these rules, then that in itself will be create a saving for the government. More efficiency throughout the sector will unlock further impact and hopefully more positive returns and you know be the thing that the government is looking for through all of this concession.

SPEAKER_05 52:24

And there's other things that just tack onto that. Like if uh you know uh the organizations have more money, they're less reliant on government funding. Like I think it's 49% of um the philanthropic sector is funded by government. And everyone's talking about diversifying away from it. So, you know, if there was actually the uh you know the structures to do so, you know, that would be a net benefit for the government. And uh, you know, the benefits go even further because the organizations that are on the ground are probably driving more impact than just having a government-funded uh project.

SPEAKER_01 52:59

Can I just also add that um one of the things that the government is actually looking at, which was covered in the Productivity Commission report, uh, is looking at increasing the uh the minimum distribution rate for these giving funds. So at the moment, uh giving funds are required to have they're required to distribute a minimum of 5%, and the government is looking at increasing that. Now that's all well and good in and of itself, but it's really not it's really not the problem. There's no point in in in there's really no point in lifting the minimum distribution rate unless you're fixing DGR, unless you're actually allowing that it that money to flow to this much greater and broader range of charitable activity and much broader and greater range of support in our community.

SPEAKER_03 53:43

I think we ran a thing a couple of months ago in the financial review about a lot of them don't even hit the 5% at the moment. I mean, is that for lack of things they want to fund, you would think? It's yeah.

SPEAKER_01 53:53

I think it's probably a few reasons better. But hopefully, but I mean I know that I've certainly heard stories of philanthropists, you know, wanting to fund uh programs or wanting to fund things uh that they can't easily fund. You know, we have to have to go through the setting up new or you know, setting up new entities or arranging an auspicing arrangement or just not doing it because of the barrier of the DGR system.

SPEAKER_05 54:18

Majority of larger foundations pay way more than 5%. Yeah. Even way more than the 8% that they're uh flagging increase to. So really the issue is with the payout actually probably indirectly hurts smaller foundations that are trying to build a corpus uh so they can actually have more sustained multi-year giving.

SPEAKER_03 54:37

See. Just uh another possible blocker. So it's not just that the system is um, you know, not supporting some charities, it's actually biased in favour of some, I guess, because at the moment they don't have to compete as strongly because the pool of charities is smaller. You were mentioning a lot of the um the larger charities are the ones that have GDR status, and maybe the smaller, more local ones don't. Is there solidarity within the sector for this, do you think? Is everyone on board? Will the really big charities support this campaign?

SPEAKER_01 55:09

So so far in the with the with the groups that I've been talking to, yes, there is solidarity. And I think that's also reflected in the not-for-profit sector development blueprint. So that was a large piece of work that engaged uh that engaged the sector. Often the large NGOs, um, the large uh charities were um very involved in that in that in that blueprint. And DGR reform is high on the list of initiatives uh prioritized in that blueprint. So, yes, there is um very strong support uh for this reform, and it's a reform that's been asked for by the sector for a long time. I haven't had anyone raise that issue of kind of competition for funds uh with me in the course of chatting to a sort of wide variety of uh stakeholders in the sector. So I think I think the sector would overall, even those people with DGR will be overall be very relieved for this reform to happen. It's like this weight, it's like this weight hanging over the sector that you know gets removed and there'll be a great deal of relief all around.

SPEAKER_00 56:13

Yeah, because I think even for a lot of these larger organizations, they might either have their listing through a bespoke listing, which could now be at risk of uh you know getting cut, or uh they might have multiple purposes or multiple programs, and that will all become easier if we do this DGR reform. So I think that there's many good reasons for larger charities to also favour the reforms, also just for their own programming and ability to run their own operations. And they won't be hassled for auspicine arrangements. Probably saves a lot of time.

SPEAKER_03 56:46

It's really easy to see, I guess, how these types of reforms would help charities and the people that rely on them. I wanted to ask you guys, what do you think this will do for society? You know, does does all of Australian society stand to gain from a fairer charity regime? Could it change the kind of people we are?

SPEAKER_01 57:03

You know, my experience talking to a bunch of particularly the the so you know, a lot of the charities that don't have DGR are the smaller charities doing work in in community. Uh and I think their capacity to uh engage with the community, to meet the needs of their local community uh with this reform will will be really enhanced. And you know, a lot of the people, the people in the charities I'm I've been chatting to, they're just so they're so worn down by this and so frustrated that it will just it'll just take a whole load of worry and pressure off. Now that's not going to mean they're suddenly gonna be flooded with money and suddenly be tripling in size. But it means that a whole bunch of their energies can be redirected somewhere else and that that that and that connection that they're making with the community, the work that they're doing with the community uh will be you know will be amplified and enhanced. And you know, we're kind of talking, you know, uh just going back to the diversity of uh of charities. I'm I'm kind of talking a lot about place-based community charities, but you know, I also talked to a charity that does financial literacy uh for school kids. They're not DGR because they provide uh that education to all children rather than a disadvantaged cohort, so they're they can't access DGR. And they had to turn down some philanthropic funding around um anti-gambling financial literacy for kids because they didn't have they didn't have DGR. So, you know, we have a massive gambling problem in this country. You know, some anti-gambling legislation our schools would be like pretty amazing. So, you know, there's the these are just like small examples. You amplify that by thousands, you know, you you're you're seeing really important work and in and important supports put being put in place that that will have a broader effect on our community over time, for sure.

SPEAKER_05 59:00

Yeah, will this improve Australia? Yeah, you betcha. It will. Like, I mean, the the have a look at the world at the moment. Civil discourse is fraying, people aren't engaging as much, volunteering's cratering, it's not even down, it's cratering. So, how do we get more people back in and representing? It's through these organizations. They literally are the glue of society right now. Like, I mean, I like this is why I love working in this sector, because I see the impact it can have. It's the only thing that I trust to be doing the right thing and fighting for the people they serve. We're seeing what's happening in the US, like all the not-for-profits are under attack because again, they're the ones that are kind of keeping it all together. So um I think if we're gonna uh look at what's going on in the US and go this could happen to us for in 10 years' time, like I mean, you just look at the surge of one nation right now. Like governments can change in an instant. Like we're one electoral cycle from everything changing, right? And I think the US has seen that, even though it's kind of like a there was a gap in between those electoral cycles. But you know, in terms of um Australian democracy, it's strong, but it's not immune. And we're on the front lines of that change. We are the the voice of you know the the fewest. Like and with a lot of the traditional organizations starting to age out, like you know, the the ones that you've always relied on, the the salvos, the rotary, the lions. You know, you've got all these newer organizations that are filling that gap for people that have fallen through the cracks and they don't have DGR status. So, how are they going to continue the work? Because they're they're fighting out there and they're fighting for those people, and we need to give them a hand.

SPEAKER_00 1:00:40

Yeah, I I'm really excited about uh advocacy organizations becoming uh DGR getting tax deductibility status through through this process. I think that you know organizations are like tax deductibility is actually seen as kind of like a trust signal to some extent for organizations and for charities. It like, you know, if you see that it's tax deductible, you're more likely to trust them, more likely to think that that's a good organization. And I think that helps with volunteerism. Um, but more broadly, I think that um advocacy organizations getting tax deductibility status will be incredibly important for engaging the community, engaging young people, getting more people to be more active in the community, see themselves as citizens and contributing people to our society. And I think that when we're able to fund those organizations tax deductibly, that will help increase an influx of people into those types of organizations, partly because they'll be seen as more legitimate with the tax deductibility status, but also because they'll be more fundable and actually maybe have more resources to support organizing on really critical issues that are becoming more and more pressing as time goes on.

SPEAKER_03 1:02:00

Cool. Well, that's a bunch of really good reasons to uh do something about this minor procedural thing, really, that needs to shift. So um I'd like to thank the panel very much. Thank you guys. Thank you, man.

SPEAKER_04 1:02:27

That was Fixing Australian Philanthropy, why DGR Reform Matters, recorded live in Melbourne and produced by Inflection Points and Effective Altruism Australia. If you want to act on what you just heard, head to Justice Connect's Unlock DGR campaign page. The link is in the show notes. You can write to your MP there. Claire's team has made it really simple with a template ready, depending on whether you're a charity, a donor, or just a citizen who thinks the system should make sense. The more that the government hears about this, the harder it is going to be to keep quietly not acting on it. Ryan Gennard's essay on DGR reform and intergenerational wealth transfer, the longer version of what you heard tonight, is up at part of our fourth issue at inflectionpoints. Inflection Points publishes long form writing and in-depth interviews required to build a bigger, better Australia. If that's a project you want to support, subscribe to the podcast and the newsletter and share this episode with someone who you think should be part of this conversation. I'm Jonathan O'Brien. Until next time, thank you for listening. Thank you for listening to the Inflection Points Podcast, a production of Inflection Points Publishing. You can support the show by sharing it with friends and colleagues, and by reviewing us on Spotify, Apple Podcasts, and RV listening. You can email us at editors at inflectionpoints. The Inflection Points Podcast is hosted and produced by me, Jonathan O'Brien, and edited by Jonathan Young. Our music is by Isha Rodney. Thank you for listening. We'll talk to you soon.