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FAQ's For Clubs and Committees
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The Casino, Liquor and Gaming Control Authority (CLGCA, formerly Liquor Administration Board) has made a number of specific rulings disallowing medical research as Category 1 expenditure. Expenditure on medical research, while commendable, is not seen as a form of community development and support and is therefore not eligible for Category 1 funding. Clubs and Committees that have received applications from organisations requesting funding for medical research may choose to contact those applicants to determine whether there are any non-research projects, such as local public health education campaigns, that are in need of support. Expenditure on medical research is therefore only eligible under Category 2.
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The NSW Government has expressed concerns about the proportion of Category 1 funding going to hospitals. The funding of the hospital system is a responsibility of the NSW Government and this should be kept in mind, especially as the Guidelines state that funding preference should not be given to projects or services that can be readily assisted by an existing Government funding program.
Funding for area health service hospitals, community health centres and other community health services is allowable as a Category 1 expense. However, if it is to be claimed as Category 1 the ClubGRANTS Local Committee has to formally endorse any funding for buildings or in-patient care equipment as being of considerable local importance and priority. The Local Committee's priority setting processes will be seen as more transparent if these medical health priorities are identified when the Committee draws up the overall social priorities list at the beginning of the annual process, rather than being decided upon later in the process in response to a specific application.
The Guidelines state that grants not endorsed by the Local Committee will only be recognised as Category 2.
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The Guidelines state that it is important that funding preference is not given to projects or services that can be readily assisted by an existing Government funding program. This is meant to prevent funding of core Federal, State or Local Government responsibilities, but does not rule out funding of other programs or services with Government involvement. For example, a project that has received one-off grants or is only partially supported by Government funding would generally be allowable.
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It would depend very much on the project being put forward. Schools are generally ineligible for ClubGRANTS funding, being core budget items for State Government. The ClubGRANTS Guidelines says that "As a general rule, it is important that funding preference is not given to projects or services that can be readily assisted by an existing Government funding program." Also, general education would not fulfil the definition of Category 1 expenditure as: projects/services that contribute to the welfare and broader social fabric of the local community and are aimed at improving the living standards of low income and disadvantaged people. However, some extra curricular activities could qualify as Category 1, when a school or P & C may be running an extra curricular service or activity above their core responsibilities, which helps low income or disadvantaged students or contributes to their welfare. It would depend on the exact nature of the activity or service, but would generally cover activities such as out-of-hours programmes for troubled students, counselling, or drug and alcohol services.
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Expenditure on local libraries is generally only eligible under Category 2. Expenditure provided to local libraries under Category 1 is only eligible if the aim of the library is to improve the living standards of “low income and disadvantaged people.” The library would also need to be available to the community, rather than restricted to just club members.
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This is to prevent for-profit organisations from applying, as the ClubGRANTS scheme is not intended to support private enterprise, and also to ensure that funding recipients are more accountable. This accountability is obviously in the interest of clubs. However, it does happen from time to time that an unincorporated organisation will apply for funding. It is recommended that in these cases, Local Committees or clubs contact the applicant organisation and advise it to form a link with an incorporated organisation that is able to endorse or auspice the application on behalf of the unincorporated group, and assumes legal and financial responsibility for the grant.
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Many clubs provide a great deal of in-kind support to community organisations, including the use of club facilities for meetings and the delivery of their approved ClubGRANTS services, for example counselling or day care. Sections 2.1.5 of the Guidelines say that expenditure in kind may be claimed under Category 1 and 2, provided that it: claims for expenditure do no exceed market value; expenditure is properly documented; and falls within the ClubGRANTS Guidelines. This means that if a club allows a community group to use its facilities for a meeting (and the group's project or service is within the Guidelines), the club may claim under ClubGRANTS the amount of the standard room hire fee that would ordinarily be charged to groups for the use of the room. ClubsNSW's experience is that most organisations do not apply for in-kind support. Rather, it is something that a club may already be doing for a range of community organisations, and might seek to claim under ClubGRANTS if it finds it has a small shortfall at the end of the year. In-kind expenditure cannot exceed 20% of a club's total ClubGRANTS spending, unless approved by the Independent Liquor and Gaming Authority (ILGA.)
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Clubs often hold fundraisers, such as raffles, race days, charity auctions and dinners where club members or the general public make direct donations to a certain cause or purchase goods or services, with the proceeds (or a portion thereof) directed to a charitable organisation or community group. Clubs may not claim the proceeds of such activities under ClubGRANTS, as the money has been obtained from club members and the general public as a good faith donation to the charity, rather than to the club. Clubs are permitted to claim only their own expenditure under ClubGRANTS (the in-kind costs.)
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On occasion, clubs may be invited to attend various fundraiser events hosted by schools or charities. For example, some charities hold fundraisers at a set price per head of $50, where the guest receives, for instance, a meal and entertainment or a golf game in return for the ticket price. In these circumstances, the ticket costs could not be claimed under ClubGRANTS as the Club is essentially receiving a benefit in exchange for the ticket and the amount is therefore not a straightforward donation.
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The Australian Taxation Office [ATO] has given ClubsNSW advice on whether a payment made by a club to a recipient organisation as part of the ClubGRANTS scheme would attract GST. The ATO determined that this payment does not attract GST, and the recipient organisation does not have a GST liability, provided they are not making a supply in relation to the receipt of the payment.
To understand GST implications, there are a number of things that clubs should keep in mind when planning ClubGRANTS payments:
1. Acknowledgement of a club by ClubGRANTS recipients. As stated above, payments to a ClubGRANTS recipient organisation will not be subject to GST unless the recipient makes a supply [e.g. advertising] in return. The mere acknowledgement of the club in the form of an article in the recipient's newsletter or annual report would not generally be considered a supply. If, however, the article provides coverage of the services offered by the club or provides publicity for club activities (i.e., a de facto advertisement), then the acknowledgement represents a supply and is subject to GST. The presentation by the recipient of a certificate, plaque or equivalent appreciation is not a supply and the payment is not, therefore, subject to GST. The granting by the recipient of naming rights for a room or building, or the provision of direct advertising, is a supply (of advertising) and the payment is subject to GST.
2. Cash versus in-kind payments. For GST purposes, there is no distinction between cash funding and in-kind assistance.
3 Payments to recipients without an Australian Business Number (ABN)
Clubs are able to distribute ClubGRANTS payments to recipient organisations without an ABN. However, if the recipient does not have an ABN, the club might need to withhold tax amounting to 48.5% of the payment (ABN withholding). In relation to ClubGRANTS payments, the ABN withholding rules will only apply if: - The recipient provides the club with a material benefit (e.g., advertising in return for the ClubGRANTS payment); and
- The payment does not represent tax-exempt income for the recipient. If the recipient is exempt from the income tax, they should provide to the club a declaration to that effect. This declaration prevents payments being subject to ABN withholding rules.
If the recipient does not possess an ABN then it will not be registered for GST. In this instance, when the recipient provides a material benefit to the club in return for ClubGRANTS payments (that would normally attract GST), GST will not apply (as the recipient will not be required to remit GST on the payment). For general information on GST matters, visit the Tax Reform Web Site at www.taxreform.ato.gov.au or call the ATO 13 24 78 Infoline.
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Not necessarily. Eligible expenditure can take many forms, including (but not limited to): - one-off funding to buy equipment, such as a vehicle for an aged care centre;
- extended or one-off staffing costs, such as training or wages for a new counsellor for a youth drop-in centre; and
- in-kind support, such as occasional or ongoing use of club facilities for meetings or other activities.
However, it is important that funding be assigned to a specific purpose. General, non-specific allocations are not appropriate.
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ClubGRANTS, particularly Category 1, is specifically aimed at promoting community support at a local level and as a result, interstate projects are allowed as Category 1 funding only in the cases of: - services to disaster victims overseas or in other Australian states;
- local activities in border areas, such as a facility located on the Gold Coast that provides substantial services to the Tweed area and other NSW residents; or
- national organisations with a presence in NSW (this category includes most of the major charities in Australia).
Applications from interstate or nationally based organisations should specifically address these requirements.
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Disasters Occurring In NSW Funding of services to victims of natural and other disasters (such as droughts or bushfires) in NSW is allowable as Category 1 ClubGRANTS funding under the ClubGRANTS guidelines. Funding for volunteer emergency services such as the SES and voluntary bush fire fighting services is also allowable. However, in allocating funding to these types of appeals, clubs should also keep the following points in mind. The ClubGRANTS scheme (particularly Category 1) is aimed at developing local community groups, and local committees have been established to assist clubs in identifying areas of need in their district. Clubs are strongly encouraged to support this process by allocating as large a proportion of funding as possible to local activities. Section 2.3.4 of the ClubGRANTS Guidelines says that expenditure on community development and support outside NSW is only recognised if it is made to locally based activities that are of a genuine cross-border nature or to nationally operating organisations with a presence in NSW or expenditure in accordance with 2.3.6 of the Guidelines.
With any general donation to large organisations or appeals that do not make a specific application for funding, clubs run the risk of the funds being expended on activities other than those permitted under the Guidelines. Clubs should bear this in mind when considering making a non-specific donation to any large or nationally-based organisation or appeal.
Although the Guidelines do not make it compulsory for Category 1 funding applicants to complete an application form, there are certain responsibilities in terms of reporting. The Guidelines say that clubs must request a report from all ClubGRANTS funding recipients, indicating how the funding was spent. Recipients of over $5,000 in funding are also required to return a statutory declaration on how the funds were expended. Clubs should address a letter to the Secretariat of the relevant fund requesting that a report be returned.
To address these issues, clubs may choose to make it a policy to reserve their ClubGRANTS funding for local groups only, and in the case of state-wide, national or international appeals use their club as an effective fundraising vehicle, through hosting fundraiser events and co-ordinating doorknocks, rather than making a direct donation from club funds.
If clubs intend to make donations to emergency appeals under ClubGRANTS Category 1, they should make this known to their Local Committee, to allow the Committee to take this into account when planning the funding calendar and deadlines for funding. In some areas, Local Committees agree at the beginning of the year that a certain small proportion of Category 1 funding may be reserved for ad hoc funding of emergency appeals through the year. This provides greater certainty to the Committee and to applicants, and allows clubs to strike a balance between developing the local community and providing support to incidents of statewide or national significance. For disasters occurring in NSW, there is no requirement for the Minister to advise Clubs that expenditure provided to victims is eligible nor identify a specific disaster relief fund that expenditure should be deposited into. Clubs can provide unlimited Category 1 or 2 ClubGRANTS funds for services to victims of natural or other disasters that occur in NSW. Disasters Outside of NSW (Interstate/ Overseas) When the disaster occurs interstate or overseas, section 2.3.6 of the Guidelines requires the Minister to advise the Club industry that expenditure provided to victims of a particular disaster is eligible. The Minister will then nominate a particular fund for expenditure. In addition to these requirements, 2.3.6 stipulates that the amount claimed cannot exceed 10% of a registered club's total ClubGRANTS expenditure. The total amount expended must be shared equally between Category 1 and 2 funding. Further, the expenditure must be deposited into the nominated fund within 12 months of the disaster's occurrence.
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ClubsNSW is seeking to provide clubs with a reliable channel for donating to large-scale appeals through the new ClubAID fund, which will only be directed towards eligible Category 1 activities. As is the case with other emergency appeal funds, however, clubs should make arrangements with their Local Committee to accommodate these donations in Committee planning.
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In order to qualify for Category 1 funding, the local committee or club must be satisfied that the proposed art therapy project supports the target disadvantaged group in its local area. Aside from ensuring that the organization is a bona fide provider of art therapy, there are no other principles giving guidance around the eligibility of art therapy projects.
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Some clubs have been approached to provide funding for a trust that pays for a particular person's education or supports a particular person suffering from a chronic or terminal illness. Although these are worthy causes, this type of expenditure would not be eligible under Category 1, because the immediate and specific beneficiaries of ClubGRANTS expenditure should be a class of persons, rather than an individual. If a trust were set up to help all victims of a particular affliction, or to benefit young people from disadvantaged backgrounds, but it was applied to individuals on a case by case basis, clubs may be permitted to fund these projects under ClubGRANTS.
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Due in part to the different sizes of ClubGRANTS clubs, there is no limit on the amount clubs may provide, and clubs are encouraged to support significant projects. However, clubs and Committees should also try to identify and fund a range of local community projects in order to assist a diverse proportion of their community.
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There is no link between the ClubGRANTS scheme and a club's Articles of Association or Constitution. ClubGRANTS is a Government legislated scheme where the funds have to be allocated in accordance with the ClubGRANTS Guidelines, as approved by the Minister for Gaming and Racing. The Guidelines make no reference to clubs? Articles of Association or Constitution but specify that ClubGRANTS Category 1 funds are to be expended on community development, community welfare, social services and employment assistance activities. It is possible that activities related to a club's Articles of Association or Constitution may be eligible for Category 1 funding and may therefore be considered by the ClubGRANTS Local Committee and by the club.
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Many clubs have long-standing or fixed commitments to certain Category 1 projects or activities in their local area. These should be considered during the Committee's deliberations, as the issue of longer-term commitments is specifically dealt with in the Guidelines. Clubs should exercise extreme caution in making long-term funding commitments through ClubGRANTS. For example, the ClubGRANTS scheme could have been abolished this year, meaning any long-term commitments would have affected the club's bottom line. The Minister for Gaming and Racing also has the power to change the ClubGRANTS Guidelines at any time and therefore a particular project or service that may be eligible for ClubGRANTS funding this year, may not be eligible for funding the following year. Where a club does have a long-term funding commitment, this must be brought to the attention of the ClubGRANTS Local Committee at the start of the year to assist the Committee in its deliberations.
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Many clubs currently fund projects and services of a regional nature. As part of the assessment process, Committees would determine if a regional application fits with the local priorities, and advise clubs accordingly. It would be wise for the Committee to have some communication on more significant regional applications to ensure they are not over or under-subscribed. Further, FaCS may be able to provide advice on relevant whole-of-government priorities.
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Other than in exceptional circumstances, grant recipients must return a report on how their funding was applied, before the organisation can be provided with further Category 1 or 2 funding. This is to ensure that funding recipients are accountable for the funding they receive and that the money is spent on the activities outlined in the original application. It is in the best interest of clubs to ensure their money is being spent appropriately. If a club wishes to fund an organisation that has not returned a report on previous allocations, the club should contact the organisation and request that the group fill in a standard report form.
In some cases, a funded project will be only partly underway. In these situations, the club should request a progress report outlining how the funds have been spent so far and the plan for the future of the project, including a timeline for completion. It is the club's responsibility to follow up the accountability procedures. However, when an application has been funded in line with priorities identified by the Local Committee, the recipient also needs to send a report to the Local Committee.
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When processing applications, Local Committees should remember that they are not authorised to veto applications for funding. The Committee's responsibility is to prioritise applications and advise clubs as to whether and how they align with local priorities, and it is up to clubs to decide how closely to follow a Committee's recommendations. However, the Guidelines say that applications should not be considered in a number of different cases where the application is in breach of the Guidelines. This may be because the applicant is a for-profit organisation or has failed to return a report on previous funding, or the project does not fall within the prescribed sub-categories for Category 1 (as would be the case with research), and other reasons as outlined in the Guidelines. In cases such as this, where the Committee considers an application to be in breach of the Guidelines for Category 1 funding, the Committee should not discard the application or prevent clubs from accessing the application. Rather, it should recommend that clubs not fund the project as the Committee believes it to be outside the Guidelines for Category 1, and provide a brief explanation as to how it believes it to have breached the Guidelines. The club can then make an informed decision, taking into account the Committee's advice. Queries as to whether a project is eligible for Category 1 funding may also be directed to ILGA for a final decision as to its eligibility. The ClubGRANTS Guidelines recommend that clubs donate 75% of their Category 1 funding in line with local priorities.
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The ClubGRANTS Guidelines do not make it compulsory for the Standard Application Form to be used. However, it is strongly recommended that use of the form be encouraged wherever possible. This enables clubs and Committees to assess all applications on an even footing, increasing the transparency of the ClubGRANTS process. It also makes the ClubGRANTS application process as simple as possible for applicants.
Using the standard form also ensures that Committees have adequate information on which to base their priority rating and recommendations, and that club boards are fully aware of how their funding will be applied. The Application Form has been developed to ensure that applicants address all the Category 1 criteria under the Guidelines. Some Local Committees have agreed not to accept applications that do not use the form and have publicised this to potential applicants.
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Generally, there is no Standard Application Form for applications for Category 2 funding, although some clubs require applicants to fill out an online form. Many Category 2 recipients have been historically supported by the club and do not fill in any type of form. Organisations seeking funding should write to the club(s), outlining their project / service, how it helps the local community, and how much funding is required. Some clubs have additional criteria that they apply to Category 2 grants, and will advise applicants of these. However, Category 2 funding recipients DO have to fill in a report on how their funding was applied. The same rules apply as for Category 1 recipients.
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The main role of the Local Committee is advisory, and its primary objectives are to bring together in one forum core participants in local community services, identifying priorities for community development and support services within the local area, and to prepare a priority list for consideration by the local ClubGRANTS qualifying clubs. The Local Committees provide advice to clubs on the social needs of the local area and to avoid the same organisations receiving funding by several clubs while others may miss out entirely. The other bodies represented on the ClubGRANTS Local Committees are the council, FaCS and NCOSS, all of which have expertise on the local needs of the area and where funding may have the most beneficial impact. The Board of Directors of each individual club retains the final decision-making power over what projects or organisations are funded, and obviously long-term relationships with certain recipients will be an important consideration. However, clubs also need to demonstrate that serious consideration of ClubGRANTS Local Committee recommendations has occurred in the allocation of Category 1 funding. If this does not occur, Government may have grounds for the view that the ClubGRANTS scheme is not worth maintaining.
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Under the Guidelines, the final decision on funding rests with the club's Board of Directors, and Local Committees may not veto Category 1 applications. The ClubGRANTS scheme's survival depends on cooperation and communication between clubs and other Committee members. If the Local Committee process is not seen to be working, clubs risk losing their ClubGRANTS tax concession and paying a higher rate of tax.
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ClubsNSW appreciates the considerable effort contributed by all Local Committee members in developing and maintaining the ClubGRANTS Committee system. There are many flow-on benefits to councils and community representatives in the opportunity to influence the allocation of a significant amount of funding to local projects. However, the ongoing prominence of the issue has been recognised. In response to this, the ClubGRANTS Guidelines have been amended to recognise funding provided to reimburse local councils (or other committee members providing a secretariat role) for the costs incurred for the administration of the Local Committee for their Local Government Area. The maximum allowable amount of funding is limited to either 10% of total Category 1 or 2 funds for the relevant LGA, or $1,000 per participating club, whichever is the lesser amount. In order to qualify for this reimbursement, local councils (or other committee members, where relevant) must apply in writing to their ClubGRANTS Local Committees, and provide such documentation to verify the claim as may be requested by the ClubGRANTS Local Committee.
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Section 23 of the Gaming Machine Tax Act 2001 says that in calculating the payable gaming machine tax for a club with two or more separate and distinct premises (be they satellite sites or the product of amalgamation), the premises are treated as separate. Consequently, ClubGRANTS liability (which is based on the gaming machine tax for each separate premises) is also treated separately. That is, if a satellite club receives gaming machine profits of over $1,000,000 over one tax year, it is eligible for ClubGRANTS, and a separate return should be lodged for that premises as well as its parent club.
This means that satellite clubs must participate in their Local Committee, as would any other club, and should have regard to identified local priorities in their own LGA when allocating funding. Clubs should keep appropriate records to support this.
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Yes, category 2 expenditure is eligible in the circumstance above provided that the expenditure was related to club core purpose activities such as greens maintenance, even if clubs are different; e.g. the ClubGRANTS eligible club is a golf club and the smaller club is a bowls club.
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The Local Committee can only deal with Category 1 funds. Category 2 remains the sole responsibility of clubs.
Some Committees have been approached to advise clubs on Category 2 grants as well as Category 1. This is not appropriate. The ClubGRANTS Guidelines, approved by the Minister, specifically limit the Committee's role to dealing with applications for specific community welfare, community development, social services and employment assistance activities, and the Local Committee membership reflects these areas.
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Local Committees do not actually handle the ClubGRANTS money clubs make the final decisions and distribute the funds, and should never hand over money to the Local Committee to distribute. It is not mandatory for a club to allocate Category 1 invoices in accordance with Local Committee recommendations. A central tenet of the scheme is that clubs retain the ultimate decisions on the allocation of funds. The Local Committee process is designed, however, to involve local councils, the Department of Community Services, New South Wales Council of Social Services and clubs in the decision-making process for setting priorities, which should be reflected in the way in which monies are allocated. To uphold this process, ClubsNSW recommends that clubs aim to fund as many Category 1 projects as possible that address these identified priorities.
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This is up to the Local Committee. Committees should take into account the number of meetings required, the implications for emergency applications, the club financial year, council funding activities, and so on. Too many meetings present a burden to Committee members, but too few meetings may mean that there is not adequate communication within the Committee.
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A number of clubs are located near Local Government boundaries and may wish to support projects in adjoining Local Government areas. It is recommended that in these circumstances, the clubs attend Committee meetings for the Local Government area in which they are located, and also take advice from the neighbouring ClubGRANTS Local Committee. This may include attending meetings of the neighbouring Committee or simply receiving minutes, recommendations and so on. Clubs in this situation may fund projects in neighbouring local government areas but should advise the Local Committee early in the funding year of their intention to allocate funds to other areas.
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Steering Group that meets regularly to review the progress and outcomes of the ClubGRANTS Local Committees. Its membership comprises:
Office of Liquor Gaming and Racing (OLGR)
Independent Liquor and Gaming Authority (ILGA)
Family and Community Services (FaCS)
Council of Social Service in NSW (NCOSS)
ClubsNSW
Local Government and Shires Association
This Steering Group meets approximately quarterly to consider feedback from representatives on each ClubGRANTS Local Committee as to what progress, from their perspective, has been achieved. The Steering Group also makes periodic recommendations to Government on changes to the ClubGRANTS Guidelines and other elements of the scheme. Local Committee members can provide feedback and make repres entations to the ClubGRANTS Steering Group either through their representative body or directly by writing to the OLGR. .
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Yes, such activities are claimable as Category 1 expenditure and fall under Veteran Welfare Services, section 2.1.1 of the Guidelines.
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