Giving Creatively: Tax-Deductible Donations to Support the Arts

At WLM we have many clients who are either passionate about the Arts or are Artists themselves.  The pursuit of Art has its own tax peculiarities and especially around donations. 

Supporting the arts is one of the most meaningful ways to preserve culture, foster creativity, and give back to the global community. Whether you're passionate about local artists or the preservation of international heritage sites like Venice, Italy — there are smart ways to make tax-deductible donations from Australia.

While direct gifts to individuals aren’t generally tax-deductible, there are legitimate, structured pathways to support both Australian and international arts initiatives and still receive a tax benefit. Here's how:

1. Donate to Australian Organisations with DGR Status

The most common way to receive a tax deduction is by donating to an organisation with Deductible Gift Recipient (DGR) status in Australia. These include:

• Museums, galleries, and performing arts companies
• Arts education programs
• Community art centres and regional arts initiatives

Donations of $2 or more are tax-deductible, provided:

• The organisation is DGR-registered under Item 1
• You do not receive any personal benefit in return

2. Support Artists Through Platforms Like the Australian Cultural Fund (ACF) 

• Supporting independent creators
• Funding creative projects in development
• Encouraging artistic innovation

3. Making Tax-Deductible Donations to Foreign Charities 

In a recent article we shared about the Saving Venice Project (read more here), we shared how one of our clients, Australian Artist Peter Day, has been working with a foreign charity to unite art, science, and environmental awareness.

While donations to foreign charities typically aren't tax-deductible in Australia, there is a workaround. To claim a tax deduction in Australia while supporting a foreign charity, you can donate through a partner Australian foundation that:

• Has DGR Item 1 status
• Is able to make grants to international organisations aligned with its charitable purposes

Here are two potential pathways:

Option 1: Use a Donor-Advised Fund (DAF) in Australia

Organisations like the Australian Communities Foundation, the Lord Mayor’s Charitable Foundation and the Foundation for Rural & Regional Renewal (FRRR), allow you to set up a sub-fund or recommend grants to overseas charities, if the purpose aligns with the DAF’s objectives and due diligence requirements are met.

Option 2: Partner Through Creative Partnerships or Custom Philanthropy

Engage a philanthropic advisor or contact Creative Partnerships Australia for guidance on structuring international giving that may qualify under specific tax rulings or private ancillary funds (PAFs).

📌 Note: You won’t be able to donate to a foreign charity directly and claim an Australian tax deduction unless you use one of these intermediaries. Always speak with a tax advisor at WLM or philanthropic fund manager first to ensure compliance.

4.  Donate Cultural Items via the Cultural Gifts Program  

If you own culturally significant artwork or objects, you may be eligible to donate them to public institutions under the Cultural Gifts Program — and receive a tax deduction based on their market value. Benefits include:

• Full tax deduction of market value
• Potential spread over up to five years
• Exemption from capital gains tax

Eligible institutions include state galleries, libraries, and museums.

5. Use Workplace Giving or Matched Donations

If your employer supports workplace giving, you can set up regular pre-tax donations to approved arts charities. Some also offer matched donations, multiplying your contribution at no additional cost to you.

6. Consider a Private Ancillary Fund (PAF)

For major donors or long-term arts philanthropists, a Private Ancillary Fund (PAF) offers a tax-effective way to manage charitable giving. You can:

• Receive a tax deduction for contributions to the PAF
• Make grants over time to eligible DGRs, including potentially via structured international pathways

A PAF can work in tandem with your desire to support international causes like Saving Venice—though it requires legal and financial setup. Talk to WLM. 

Quick Tips Before You Donate

• Always request a tax receipt showing the donation amount and DGR status
• Confirm DGR registration for Australian tax deductibility (especially with international giving)
• Consult a financial advisor for complex or high-value donations

WLM can help