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Your COVID-19 funding questions answered

Many organisations run into trouble because they rely on too few sources of funding, or because they have only a handful of supporters involved in raising money. If any of those sources dry up or if any of those people leave, organisations can soon find themselves unable to pay the bills.

Lisa Jennings
ICDA's Lisa Jennings

The COVID-19 crisis has exposed many organisations that rely too heavily on just one or two funding streams.

As part of the Save Our Sector free webinar series, Our Community governance trainer Lisa Jennings joined grants database manager Stef Ball to examine the seven pillars of funding, and what the pandemic has meant for grantmakers and grant recipients.

The hundreds of webinar participants were eager to learn how to do more to diversify their funding and build the resilience of their organisations. Here are some of their top questions answered.

1. What is DGR status?

Deductible Gift Recipients (DGRs) are organisations that can receive donations that are tax deductible. If a donation is tax deductible, the donor can deduct the amount of the donation from their taxable income when they lodge their tax return. The Australian Taxation Office (ATO) is responsible for decisions on DGR status. 

2. Do any organisations offer support in applying for DGR status?

Our Community’s Funding Centre help sheet on DGRs can be found here. Guidance from the Australian Charities and Not-for-profits Commission (ACNC) can be found here. And Justice Connect offers a comprehensive guide to applying for and maintaining DGR endorsement here.

3. Can donors get tax deductible receipts if donations are made via crowdfunding?

Yes, but there are some important things to remember.

If you have DGR status, you can provide a tax-deductible receipt in return for a pledge of the same amount. You can’t, however, provide a tax-deductible receipt in return for a pledge associated with a reward. For example, let’s say one of your supporters wants to pledge $100 towards your project in return for a reward of entry to your next gala ball, and also wants to pledge $50 as a donation towards your project. They’ll need to make two separate pledges, and you’ll need to issue two separate receipts. The receipt for $50 will be tax deductible, and the receipt for $100 won’t be tax deductible.

It's your responsibility to issue correct receipts and to ensure that you're operating within all applicable laws and regulations. If you're unsure, we recommend you speak to a fundraising expert, lawyer or tax adviser.

Stef Ball
Funding Centre's Stef Ball

4. Our school community fundraising often serves two purposes: to raise funds for the school (often with a specific purpose in mind) and as an opportunity for the school community to connect. How can we achieve both these aims while social distancing?

Starting an online fundraising community – via a website, social media platform or crowdraising platform – enables you to raise money while connecting as a group. Have a look on the GiveNow site here for ideas.

5. Our fundraising relies on families and the school community as our main revenue base. But right now more families are struggling financially, so it seems tricky to ask them to contribute money. Have you got any advice?

Check out this help sheet from the Funding Centre: Fundraising during the COVID-19 crisis: top 10 tips which outlines how you can and should revise your relationship with funders and donors during the pandemic. Also read this guide for donors – How to give during the COVID-19 crisis. It addresses giving strategies, affordability and alternative means of support.

6. Are there any stats or data on your website that could be useful?

Yes, we’ve recently completed two major surveys of not-for-profits. One looks at the impact of COVID-19 on community organisations, and the other looks at the key challenges already facing the sector before the pandemic, as nominated by not-for-profit leaders. Both can be found here. We’ve also established a COVID-19 Research Hub focused on NFPs, here.

7. Aren’t some philanthropic organisations "hibernating" during the lockdown?

Yes. Many funders – including philanthropic funders – have postponed, redirected or in some cases cancelled funding rounds while they consider how best to support the communities they aim to serve. You will need to check a funder’s website (if they have one) or contact them individually to find out how they are responding to the situation. 

8. Are philanthropic contacts and PAFs (Private Ancillary Funds) listed on the Funding Centre site?

The Funding Centre doesn’t have a funder directory, but users can search for grants by funder. A grant listing typically includes the funder’s contact details, whether the funder is a philanthropic organisation, a PAFs or some other type of funder. Go to www.fundingcentre.com.au (subscription required).

9. I'd like to hear how to categorise and develop a strategy aroundsystemic solutions and grassroots solutions. The gaps in the system won't ever get filled until we create a structure and framework that supports reform as opposed to putting Band-Aids on problems.

You raise a few issues here, but at the heart of them is the need for advocacy to government and partners to build better solutions to social problems. We’ll be exploring this issue during Australian NFPs Advocacy Week, September 21–25, with our partner BDO. We’d suggest staying in touch with the peak organisation for not-for-profits and charities, the Community Council for Australia (CCA), which is extremely active in this area. Check out Our Community’s interview with its CEO, David Crosbie, discussing the role of NFPs in advocacy.

10. Do you need to be a member of Our Community to access all of these websites and resources that are being mentioned, i.e. GiveNow, Save Our Sector and others?

Membership of Our Community is free, as are most of the help sheets, policy templates and other resources offered by the Institute of Community Directors Australia (ICDA) and the Funding Centre.  The Save Our Sector site hosts pandemic-related resources such as webinars, news articles and more, and it’s also free.

You’ll need a subscription to access the Funding Centre grants database and to manage and track your grant applications, as well as to receive alerts about new and updated grant rounds. The price is $125 per year for a single-user NFP subscription. You can trial the Funding Centre for 14 days for free by filling in this form.

GiveNow has a free “starter plan” for those who have a single “cause” and are looking to raise less than $10,000. GiveNow's crowdfunding service CrowdRaiser™ has a small fee of 3%, which is much lower than other crowdfunding services. You’ll find more information on GiveNow plans here.

MORE INFORMATION

Webinars: Diversify your fundraising with the 7 pillars | Engaging with funders during a crisis

Funding Centre: Assistance for organisations affected by COVID-19

GiveNow: Give help during COVID-19 | Pandemic giving strategies

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