The headline recommendation of the Productivity Commission’s final report into philanthropy is to remove barriers that prevent registered charities from accessing deductible gift recipient (DGR) status. It could be good news for public interest journalism.
Under the existing system, not-for-profits go through a two-stage process: first to register as a charity, then to apply for access to tax-deductible gifts. The second step is far from automatic. Though there are around 60,000 registered charities in Australia, only 25,000 have achieved DGR status.
The Commission’s proposed reforms would simplify this process and provide registered charities with DGR status automatically if they are undertaking activities which provide a public benefit and which would be unlikely to occur without philanthropic support.
This change would cause the number of charities with DGR status to rise to around 40,000, including those which produce public interest journalism.
Currently, not-for-profit news organisations must travel a long and complex road in order to obtain DGR status. Journalism is not a charitable purpose, and so not-for-profit media apply under other categories – public education, community building – usually to little success. Outside of community radio, very few have managed it, and this is a serious barrier to developing charitable news in Australia.
The Productivity Commission draws on the experiences of the not-for-profit media sector when making its case that the process for applying for DGR under what is called the ‘specific listing’ approach is ‘opaque and difficult to navigate’.
The Commission did not go so far as to recommend a new charitable purpose for public interest journalism, despite urging by the Public Interest Journalism Initiative, Croakey Health Media, AAP, and others. It concluded that there is no strong case for a separate definition but stressed that journalism should be considered eligible in the existing ‘Other charitable purposes’ category. Under its proposed reforms, this would be enough to provide DGR status to not-for-profit media, a benefit the Commission notes repeatedly in its report.
The Government is still finalising its response to the recommendations. The necessary process may still take years, but if the Government adopts the recommended reforms, the most serious barrier to the development of a charitable news sector in Australia could be taken down.
Gary Dickson, CMT Research Fellow