Raising giving fund distributions won’t fix a broken DGR system locking out half of Australia’s charities
3 Mar 2026
MEDIA RELEASE
Justice Connect says the Federal Government’s decision to increase the minimum distribution rate for giving funds from 5 per cent to 6 per cent will have limited impact unless broader reform of Australia’s Deductible Gift Recipient (DGR) system follows.
Without structural change, more than half of Australia’s registered charities will remain unable to access the estimated $11 billion held in private giving funds.
Giving funds can only distribute grants to organisations with DGR endorsement. Currently, fewer than half of Australia’s registered charities are eligible. As a result, many community-based organisations — including Neighbourhood Houses, community gardens, charities focused on disaster resilience and climate adaptation, and organisations working to build social connection and community cohesion — are excluded from accessing philanthropic capital held in these structures.
While lifting the mandatory distribution rate by one percentage point will modestly increase annual grantmaking, it does not address the underlying inequity embedded in the DGR system.
In its 2024 Inquiry into Philanthropy, the Productivity Commission found the current DGR framework is not fit for purpose and lacks a coherent policy rationale. It recommended a simplified, principles-based system under which most charities would be eligible for DGR endorsement.
The Government has not yet formally responded to these recommendations.
Extending DGR eligibility to the majority of charities would unlock significant additional funding for organisations responding to rising demand driven by cost-of-living pressures and climate-fuelled disasters.
Chris Povey, CEO at Justice Connect, said:
“We welcome the increase in the minimum distribution rate for giving funds, but we are disappointed the Government hasn’t taken this opportunity to commit to more substantial reform of the DGR system.
More than half of Australia’s charities will see no benefit from this change because they are locked out of DGR by an outdated, overly complex and unfair system.
If we are serious about strengthening the charitable sector – particularly at a time when charities are grappling with increased demand and constrained funding – we need to ensure more charities can access philanthropic support.
We urge the Government to back the charitable sector and act on this urgently needed reform to extend DGR status to the majority of Australia’s charities.”
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MEDIA ENQUIRIES:
Emily Malone, Justice Connect
emily.malone@justiceconnect.org.au
+61 3 8636 4476
About Justice Connect: In the face of huge unmet legal need, Justice Connect’s vision is a world in which legal support is within everyone’s reach. We have been serving the community for more than 25 years. We are a registered charity and accredited community legal centre.
About Not-for-profit Law: Not-for-profit Law is Justice Connect’s specialist program for community organisations and is a sector-led response that not-for-profits and their peak bodies trust. It’s the only service of its kind in Australia. Since its establishment in 2008, Not-for-profit Law has helped prevent and resolve legal, regulatory and governance issues for hundreds of thousands of community organisations across Australia.
Our partners: The Unlock DGR campaign is supported by Minderoo Foundation, a modern philanthropy working to forge a fair future. Minderoo tackles tough, persistent challenges through evidence, partnership and practical solutions that create lasting change. Learn more at minderoo.org.