Donating and crowd funding
Spending money for good
With thousands of charities and projects competing for your
support, it's important to do some research to make sure your money
will go where you want it to.
Here are some things to think about before you decide to donate
to a charity or contribute to a crowd funding project.
Choosing a charity to
Your decision to support one charity over another is usually
based on your interest in the cause the charity supports. You may
also choose a charity as a way of remembering a deceased relative
or friend. Whatever your motivation, it's important to make sure
you are comfortable with the charity's activities and how it plans
to use the donations it receives.
Donating directly to an overseas-based charity can be risky as
it may be difficult to verify the information found on websites or
social media sites.
You may prefer to donate to an Australian charity that supports
the cause or project you're interested in. Many Australian
charities operate overseas but are based in Australia.
Things to check before you donate
Check it's a legitimate charity
Even if you've heard of the charity, you should check that the
person who contacts you is authorised to represent the charity.
If the name of the charity is unfamiliar, ask for more
information. For example, ask:
- What cause do you support?
- Where is the charity based?
- What are donations used for?
- Are you affiliated with any other charities or
- Are donations tax deductible?
It pays to be careful, even if you get a satisfactory response
to these questions.
If you've been approached face-to-face, ask to see some
identification and a copy of the charity's pledge form. These
- the full name of the organisation
- the corporate registration number such as an Australian
- the business address
- the organisation's logo.
Call the charity directly to verify their contact details, and
be sure to cross check their phone number in the telephone
Charities must also be registered with the Australian Charities
and Not-for-profits Commission (ACNC). You can check the ACNC website, to see if the charity
is registered. Alternatively, the charity may display a Tick of Charity
Registration (from the ACNC) to show they are a registered
Be wary of giving credit card details
If you've been contacted by phone do not give out your credit
card or banking details. There will be other ways of donating if
it's a reputable charity.
Ask about these options and make sure you check the validity of
any website or social media page you're directed to.
To find out about the latest charity scams see the ACCC's
SCAMwatch charity scams webpage.
Check if the donation is tax
A donation is only tax deductible if it is given to a charity
that has been endorsed by the Australian Taxation Office (ATO) as a
deductible gift recipient (DGR) organisation.
To receive a deduction the donation must be $2 or more and must
be claimed in your tax return for the income year in which the
donation was made. In some circumstances, you can elect to spread
the tax deduction over five income years. For more information
visit the ATO's gifts and
You can check if an organisation is a DGR by visiting
the Australian Business
Register or phoning the ATO on 13 28 61.
Ways to donate
There are a number of ways you can donate to a charity.
- One-off or ongoing - You may decide to
make a regular, set donation or you may prefer making a one-off
donation following a particular fundraising campaign or an urgent
need, like a natural disaster.
- Workplace giving - You can support a
charity through automatic deductions from your salary. If your
employer has a workplace giving scheme your donation can be
deducted from your pay and sent directly to your preferred
- Leave a bequest in your will - Another
way of donating is to leave a bequest in your will. Contact the
charity directly to discuss your plans.
- Get involved - Instead of a cash
donation, you could contribute to your favourite charity by
donating goods, your time or even your skills or expertise.
How to complain about a
You can complain about a charity to the relevant state or
territory regulator. To find the regulator in your state visit the
ATO: State and territory
government requirements - fundraising. You can also complain to
the Australian Charities and Not-for-Profits Commission if the
charity is registered, see the ACNC: Raise
a concern about a charity webpage.
Australian charities working in the area of overseas aid, who
get funding from AusAID, must be members of the Australian Council
for International Development (ACFID), and must adhere to the ACFID
Code of Conduct. For more information about the code, including its
signatories and how to register a complaint, see the ACFID: Code of Conduct
Crowd funding is used by artists and entrepreneurs to find money
to fund their projects. Money is usually raised through a crowd
funding website, which usually has information on the project's
aims and objectives, how it will work and its budget. The projects
they fund are usually creative, business or social initiatives with
relatively small budgets.
Crowd funding projects are usually promoted using social media
and word-of-mouth. Anyone can pledge money to the project via the
website and some get world-wide support from complete
What will you get for your money?
There is no monetary reward for supporting a project and
sponsors are often enticed with a small gift such as a signed CD, a
free T-shirt or a discount on products in return for their
Try to find out as much information as you can about the project
and its owner before you sponsor them. For example:
- Have they used crowd funding before?
- Have they been involved in successful projects in the
- Did they deliver the gift, if one was promised?
What if the target funding is not reached?
In most cases, only projects that raise enough money can go
ahead. Most, but not all sites return funds if the target amount is
Crowd funding websites make money through a levy on the total
funds received for the campaign. Often the levy is only deducted if
the campaign goes ahead.
Crowd funding is different from crowd-sourced funding of
Crowd funding is different from crowd-sourced funding (also
called equity crowd funding or crowd-sourced funding of shares),
which is used by start-ups and small and medium-sized companies to
raise money from the public to finance their business. In exchange
investors receive securities in the form of shares.
How to get involved in crowd funding
If you want to participate in crowd source funding, you'll need
- sign up to the website
- nominate the amount you would like to pledge to the
- provide your credit card details or make a payment via PayPal
or another third party payment facility (but check it's a secure
site before you pay).
Once the project has reached its target funding, the money
you've pledged will be deducted from your account.
Is crowd funding tax deductible?
Most crowd funding websites do not have Deductible Gift
Recipient (DGR) status so you will not be able to claim a tax
deduction for the money you pledge.
However, the project creator may have DGR status. If so, it is
up to them to provide you with a tax-deductible receipt if you
You cannot claim a tax deduction if you have received a gift,
reward or discount.
Check it's a legitimate project
Raising money for a crowd funding project relies heavily on
Even if there's a small gift involved, the main motivation for
sponsoring a project is usually because you have an interest in the
project and a desire to see it succeed.
If you've heard about a crowd funding project that you'd like to
support, make sure you check the legitimacy of any website or
social media page you're directed to. Remember to carefully read
the terms and conditions on the crowd funding site before signing
Don't give your credit card details unless you're comfortable
that the website, the project and its owners are legitimate.
Visit our banking and credit scams page
to find out what to do if you think your credit card details have
been compromised or you think you've been scammed.
Donating to a charity or supporting a project
you really believe in can be rewarding, but you need to be careful
that you're not being taken advantage of.
Last updated: 12 Feb 2019