Draft Guidelines for Community Foundations

By: Stephanie Judd, Casey Dias

Treasury has published draft Guidelines that set minimum standards of governance and conduct for Community Charities, a new class of DGR categories. Similar to Private or Public Ancillary Funds, these draft Guidelines contain rules on the establishment, maintenance and winding up of Community Charities.

The key notable features of these draft Guidelines are:

• an annual minimum distribution of at least 4 per cent of the market value of the net assets unless an exception applies;
• must be established and operated only in Australia, but can make distributions to DGRs that operate outside Australia;
• requirement to prepare, maintain and implement an investment strategy, including setting out investment objectives and methods to be adopted to achieve them;
• financial accounts must be prepared in accordance with accounting standards and be available to the Commissioner of Taxation upon request;
• must issue a receipt for every gift received and include details of the charity, the donor and the gift;
• trustee or corporate director must exercise the degree of care, diligence and skill that a prudent individual would exercise in managing the affairs of others; and
• administrative penalties apply for non-compliance with Guidelines.?

Feedback on the draft Guidelines can be provided to Treasury by 3 December 2024. Please contact Stephanie Judd, [email protected] if you have any questions or would like us to submit a response to Treasury on your behalf.

Link: https://treasury.gov.au/consultation/c2024-597338