To help shape the future of giving in Australia, the Productivity Commission recently released a draft report that dives into the current state, challenges, and opportunities in the philanthropy space.
Since Grant Thornton’s submission to the Productivity Commission in May 2023, we’re delighted to see the report identify barriers for philanthropy in Australia.
The draft report highlights the following points:
- An emphasis on the importance of philanthropy and volunteering in building social capital, trust and driving innovation within the community sector.
- A recognition that the current deductible gift recipient (DGR) system is not fit-for-purpose and needs to be overhauled.
- The establishment of an Aboriginal and Torres Strait Islander philanthropic foundation.
- The identification of a complex and inconsistent regulatory framework, a lack of reliable data, a mismatch in supply and demand, and a risk-averse attitude among stakeholders as key challenges. These barriers create uncertainty, unnecessary compliance costs, and hinder the full potential of these sectors.
- The proposal of a range of reforms and recommendations. These include simplifying and harmonising the deductible gift recipient system, enhancing the role and forum for regulatory bodies, supporting social enterprises and impact investing, and fostering a culture of innovation and experimentation.
Grant Thornton’s submission towards the report was well-aligned with the released recommendations in enhancing transparency and collaboration within the sector. We’re pleased to see reviewing the complex regulatory, tax framework for philanthropy, simplifying definitions and eligibility criteria for entities like DGR and public benevolent institutions, were considered of high importance. Recognising the challenges and opportunities in the digital era, we also urged additional exploration of how digital transformation affects philanthropy.
Looking ahead to a collaborative future
As stakeholders engage in the public submissions phase, hopefully these recommendations will pave the way for a more streamlined, effective, and impactful philanthropic and social finance landscape. The proposed reforms have the potential to create a more favourable environment for collaboration and innovation – ultimately creating greater social and economic well-being.
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