Federal Parliament has recently passed legislation that allows tax deductibility for donations to a new education charity called Australian Schools Plus.

For the first time, this will allow donors to receive a DGR receipt for donations for general educational purposes to particular schools.

What are the Opportunities for Deductible Gift Donations for Schooling?

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Woman confused while filling out tax formSummary – California couple donated real estate worth USD18 million to a charity but their failure to complete the Internal Revenue Service (IRS) form correctly lead to their loss of the entire associated tax deductions.

California couple, Joseph and Shirley Mohamed, donated real estate worth USD18 million to a charity in 2003 and 2004 but their failure to follow instructions on how to document their donations when completing the Internal Revenue Service (IRS) form lead to a loss of the entire associated tax deductions.

Joseph and Shirley Mohamed set up a charitable remainder trust and donated six (6) properties to it. Under the tax relief allowed to these types of trusts, the couple would have been entitled to USD4.2 million in immediate charitable contribution deductions and another USD15 million in future years.


Continue Reading California couple loses USD18 million over IRS form filling error

For charities that invite and rely upon donations from the public, their reputation and the public confidence in them is fundamental to their livelihood and success.  Bad press of any kind can lead to a significant reduction in donations, embarrassment for supporters of the charity, and may even invite investigation by regulatory bodies into the charity’s management.

A timely example of the impact of negative publicity can be seen in Sydney Morning Herald’s investigation into the Small Miracles Foundation.  The foundation in question provides grief counselling to parents that have lost their baby.

Risk to reputation can be managed by transparency, proper record-keeping and reporting and having proper staff management practices

The article reported:

  • allegations from a number of parties, including the charity’s accountant, alleging the charity’s “mismanagement” and refusal to give access to financial records;
  • allegations of unfair dismissals made by former staff; and
  • confusion as to who runs the charity and that detail of board members, management or staff are not available on the charity’s website.

Whether or not the allegations are correct, they are serious.  They have the real potential to drive away donors and result in further undesirable consequences.
Continue Reading A Charity’s Reputation – How to Manage the Risk