Creative New Zealand has developed an online donations toolkit, which explains the changes to tax rules, how you can benefit from them, suggestions on how to find the right donor, plus a video interview with a donations arts success story.

Useful links to resources, downloads for the correct forms and a glossary that unravels the 'tax language' are also features.

From 1st April 2008, donors can claim more money back from the donations they've made. Individual donors:

Must make their donation to an Inland Revenue Department - approved donee organisation and keep the receipt of the donation.

Can claim back 33% (or 1/3) of the total donations they've made in one tax year.
For example, Manu donated $30,000 in one tax year (1st April - 31st March). She can claim back $10,000.

Must not claim back more than their total taxable income for the year.
For example, Peter donated $60,000 in one tax year (1st April - 31st March). One third of his donation is $20,000. However, Peter's total taxable income for that tax year was $15,000. Therefore, Peter can only claim back $15,000.

What has changed? In the past, individuals could claim back a third of their donation but only up to a total of $630.00 in one tax year.

It's not a change, but your donors should know that they can claim back all donations over $5.

Why is this change good for you? The increased tax credit (rebate) may encourage more people to give donations to your organisation.

What else will change? Plans are underway to allow people to make donations straight from their pay (payroll giving). This toolkit will let you know when it is an option. Then it will be even easier for people to make donations!

Company donors Must make their donation to an IRD-approved donee [link to glossary] organisation and keep the receipt of the donation.

Can deduct the total amount of donations they've made from their yearly taxable income.
For example, Company Ltd donates $20,000 to an organisation. Because its annual income before tax is $200,000, Company Ltd can deduct the full $20,000 from its annual tax return and file for an income of $180,000.

Can make this deduction if they are a publicly listed company or an unlisted close company.

What has changed? In the past, companies could only deduct 5% of their total donations for the year from their tax return.

Unlisted close companies were not able to make any deductions for donations.

Why is this change good for you? The increased reduction makes donations a good option for companies wishing to reduce their end of year tax bill. This may encourage more companies to give donations to your organisation.

Maori authorities Maori authorities have the same rules as companies - they can deduct the total amount of donations they've made for the financial year from their annual tax return.

Creative New Zealand online donations toolkit Using the toolkit, you can:

Read about the changes
Take advantage of the changes
Find the right donor
Check what you need
Do the paperwork
Explore what others are saying
Know the vocabulary

Watch a success story: David Inns (pictured) 2008 NZ International Arts Festival Trust CEO

Creative New Zealand thanks the following organisations for their time, resources, advice and extensive knowledge: Charities Commission New Zealand, Inland Revenue Department [IRD], Philanthropy New Zealand [PNZ], Dance Aotearora New Zealand [DANZ], Toi Maori Aotearoa and Lift Education.

CNZ looks forward to your feedback on this tool - tell us your own success story, share your experience or suggestions you may have for this resource.

29/01/09