---
title: "Gift fund compliance checklist for a deductible gift recipient (fund, authority or institution)"
url: "https://ailawframework.com/precedents/not-for-profit-charities-and-associations/dgr-gift-fund-compliance-checklist"
type: "precedent"
site: "AI Law Framework"
id: "a35-dgr-gift-fund-compliance-checklist"
area_id: "A35"
kind: "checklist"
ai_level: "yellow"
version: 1
task_ids: ["A35-T1-R5", "A35-A20260923-3", "A35-T1-R10"]
law_stated_as_at: "2026-10-18"
---

# Gift fund compliance checklist for a deductible gift recipient (fund, authority or institution)

> Checklist to test whether a DGR’s gift fund meets the ATO’s requirements: rules and winding-up clause, what must and must not be credited, separate records, permitted uses, multiple funds, and correcting amounts…

Canonical page: https://ailawframework.com/precedents/not-for-profit-charities-and-associations/dgr-gift-fund-compliance-checklist  
Law stated as at: 2026-10-18

Site index for agents: https://ailawframework.com/llms.txt

Checklist to test whether a DGR’s gift fund meets the ATO’s requirements: rules and winding-up clause, what must and must not be credited, separate records, permitted uses, multiple funds, and correcting amounts wrongly received.

## Key facts

- Kind: Checklist. Steps or checks to work through and tick off.
- Practice area: [Not-for-Profit, Charities & Associations](https://ailawframework.com/precedents/not-for-profit-charities-and-associations.md)
- Jurisdictions: Australia
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-18
- Status: Maintained. Checked on 2026-10-18 against the 2 authorities it cites, for Australia.

## When to use it

Use on DGR endorsement for the operation of a fund, authority or institution, at each annual compliance review, before a new fundraising program, and when a DGR is merging, winding up or losing endorsement. It does not apply where the organisation is endorsed as a DGR as a whole and the fund is part of it.

## Used for these tasks

- [Draft a deductible-gift or tax-concession endorsement application](https://ailawframework.com/practice/not-for-profit-charities-and-associations/draft-a-deductible-gift-or-tax-concession-endorsement-application.md)
- [Build a grants and restricted-funds table from the accounts and grant deeds](https://ailawframework.com/practice/not-for-profit-charities-and-associations.md#A35-A20260923-3)
- [Build a winding-up and surplus-distribution checklist](https://ailawframework.com/practice/not-for-profit-charities-and-associations/build-a-winding-up-and-surplus-distribution-checklist.md)

## How AI may be used

AI may sort receipts and ledger entries into the checklist categories and check the rules for the required clauses; the lawyer or accountant decides whether each amount is a gift or deductible contribution and whether the fund complies.

**AI may:**

- Check the gift fund rules or constitution for each required characteristic and quote the clause that meets it
- Sort a ledger extract into gifts, deductible contributions, sponsorship, event and commercial receipts, flagged for review
- List transfers out of the gift fund with their stated purpose for the reviewer to test against the principal purpose

**AI must not:**

- Must not decide whether a receipt is a gift or deductible contribution, or whether a use is for the principal purpose
- Must not change the gift fund rules or the winding-up clause
- Must not process donor names and amounts outside the organisation’s approved systems

**The lawyer checks:**

- The rules require surplus gift fund assets to go to another gift deductible fund, authority or institution on winding up or revocation, whichever occurs first
- Only gifts, deductible contributions and money received because of them are credited, and sponsorship, commercial and non-deductible event receipts are kept out
- Any amount wrongly credited has been removed as soon as practicable and the accounts noted
- Each fund, authority or institution has its own gift fund or records that show the amounts and uses for each

## Authorities

- [Australian Taxation Office, Endorsement for the operation of a fund, authority or institution (gift fund characteristics, set-up, operation, amounts credited, use, winding up and revocation)](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/getting-started/getting-endorsed-for-tax-concessions-or-as-a-dgr/is-my-organisation-eligible-for-dgr-endorsement/rules-and-tests-for-dgr-endorsement/endorsement-for-the-operation-of-a-fund-authority-or-institution)
- [Income Tax Assessment Act 1997 (Cth) Div 30 (deductible gift recipients), as summarised in the ATO guidance](https://www.ato.gov.au/businesses-and-organisations/not-for-profit-organisations/getting-started/getting-endorsed-for-tax-concessions-or-as-a-dgr/is-my-organisation-eligible-for-dgr-endorsement/rules-and-tests-for-dgr-endorsement/endorsement-for-the-operation-of-a-fund-authority-or-institution)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/not-for-profit-charities-and-associations/dgr-gift-fund-compliance-checklist and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*