Australians generously donating to bushfire appeals this year are being urged to consider how they choose to do so with so many online options available.
Gamers on Twitch this week raised hundreds of thousands of dollars, but none of the individual donors will be eligible for a tax deduction. Those fundraising may also run into trouble when they declare their income at the end of the financial year.
Direct donations to registered charities are far less complicated, H&R Block tax communications director Mark Chapman told Business Insider Australia.
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It's heartening to see the outpouring of support in the wake of Australia's bushfire crisis.
In 2020 there have never been so many ways to give, as social media unites people in unusually charitable ways. However, before you donate you should be aware of where your money is going, how it might be used, and where it leaves you at tax time.
"You can claim a tax deduction as long as you're giving $2 or more to a registered organisation and get a receipt," H&R Block tax communications director Mark Chapman told Business Insider.
"That's the case if you're donating to an online appeal site like the Victorian Government one for instance," he said.
But in the internet age there are plenty of other ways money finds its way to a cause.
Take game streaming service Twitch, for example. Users have been supporting their favourite gamers in appeals this week, chipping in hundreds of thousands of dollars. Gaming group The Click Crew raised some $300,000 during their streaming marathon for the Country Fire Association (CFA).
However, while the money is obviously well-intentioned, it's a complicated way to give.
"You're basically giving money to another individual who isn't registered as a charity or with the government. It's unlikely you're getting a receipt and it doesn't sound like it's tax-deductible," Chapman said.
While that mightn't be a concern for those who throw in a few dollars, it might leave a bitter taste in the mouths for those who chipped in upwards of a $1,000.
However, it also potentially leaves the Twitch fundraisers in a pickle.
"If the gamer wants to claim the deduction they would need to claim it as income so it all becomes a really complicated way to do something quite simple."
Twitch has been contacted for comment.
Facebook Fundraisers, GoFundMe, and Givit
More common are fundraisers on Facebook and crowdsourcing platforms like GoFundMe and Givit. Thankfully they're also a little more straightforward.
"On sites like Facebook, it's typically a lot more straightforward. You'll very often be clicking on a link which will then take you to an appeal website or something like that," Chapman said.
If not, Facebook donations are direct to charities themselves, meaning as long as it's registered with the Australian government you'll be eligible for a deduction. The same goes for GoFundMe and Givit.
In any case, it's always important to check the money is meant to be going. Take the Liberal Party of Australia's gaffe earlier this week, where a fundraiser linked straight back to the party's website – featuring a political donation button – rather than a charity. (This was rectified quickly.)
Ultimately, you're probably better off just donating directly.