Melbourne Grammar, Brighton Grammar, Scotch College pocket $150m in tax-free donations

Melbourne’s wealthiest private schools are scoring massive tax-free donations to help them build new infrastructure. See which schools rake in the most.

Victoria’s wealthiest private schools are pocketing nearly $150m a year in tax-free donations, and commercial income, with one school raising $1.5m in a 24-hours fundraising blitz.

While state schools struggle to get by with portable classrooms up to 70 years old, generous private school philanthropy is fuelling an unprecedented building and expansion spree at the state’s wealthiest schools.

The latest federal figures show Victorian schools received an additional $148.7m in donations, investments and other commercial income in 2023.

This is despite such non-profit organisations enjoying tax exempt status.

In the same year, 1500 state schools in Victoria received $32m in total in non-government capital funding – just $21,000 per school.

Despite tuition fees rising year on year, parents and alumni are continually asked to donate to building and scholarship funds and trusts which are tax deductible.

Schools are always searching for new ways to reach potential donors, with scholarship recipients at MLC and Melbourne Grammar used in advertising in order to open parents’ and old scholars’ wallets.

Mount Scopus is spending $195m just to buy the land for its new one-location campus.

The top ten schools with the most additional funds received $78m, with Brighton Grammar leading the pack with $9.9m, followed by Melbourne Grammar on $9.8m. Brighton Grammar’s website notes that “School fees alone do not provide the capital needed to shape the future of BGS”. The school recently unveiled a $60m hi-tech learning space.

One of the most sophisticated philanthropic schools is Scotch College, which has an act of Parliament to manage its financial largesse. A foundation patron at Scotch College costs $1m plus, and a membership of the Forbes Society is $500,000.

Geelong Grammar has a well-established philanthropy arm, with one recent push raising $1.58m in 24 hours.

St Catherine’s School attracted nearly one million dollars in 2023, with $750,000 going towards building and $150,000 for scholarships, with two-thirds of the funds coming from current parents.

Ivanhoe Girls' Grammar is spending $30m on a new Enterprise Centre.

Calls are mounting for this luxury tax loophole to be closed, following a Productivity Commission report which claimed such gifts do not benefit the broader community.

Trevor Cobbold, the national convener of public schools’ lobby group Save our Schools, said such money “is ignored by governments when determining taxpayer funding of these schools.

“One step towards a fairer funding method and eliminating the waste is to include non-fee income of private schools, especially that flowing to the richest schools, in determining their level of Commonwealth government funding,” he said.

Morgan Harrington, research manager of The Australia Institute, said it is “doubtful there is a benefit to the public from these taxpayer funded subsidies”.

“It’s become an arms race for already wealthy schools to get extra luxuries,” he said.

Dr Matt Wade from La Trobe University said “all schools in Australia, public or independent, faith-based or secular, deserve sufficient funding support for capital projects”. But he questioned why such donations to wealthy schools should remain tax deductible.

“It is a cruel joke that taxpayers who could never dream of sending their own kids to such wondrous schools are indirectly subsidising those that can,” Dr Wade said.

The $60m Duigan Centre at Brighton Grammar is preparing boys "for the world beyond tomorrow".

It comes as such schools are spending major sums of money on capital projects. Mount Scopus Memorial College has paid $195m for a new campus at Caulfield Racecourse, Presbyterian Ladies’ College paid $85m for a new swimming pool centre and Trinity Grammar is paying $20m for a new grandstand at its Bulleen sports fields. Other schools with multimillion building plans under consideration include Bacchus Marsh Grammar, Ivanhoe Girls’ Grammar and Geelong Grammar.

St Catherine’s School attracted nearly one million dollars in donations, with $750,000 going towards building and $150,000 for scholarships, with two-thirds of the funds coming from current parents.

Natalie Charles, principal of St Catherine’s School said there is a “long and proud history of giving that provides the opportunity for girls, who would not otherwise be able to access a St Catherine’s education, to do so”.

A spokeswoman for Brighton Grammar said the school was “fortunate to be supported by current and past families, alumni and local businesses, whose generosity helps fund a wide range of initiatives”.

“We are truly grateful for their ongoing generosity.” The money is used for renewed learning spaces and scholarships.

Philip Grutzner, headmaster of Melbourne Grammar, said the school’s “philanthropic and other income including any interest earnt, is primarily used to offer means-tested scholarships to a diverse range of students, including 15 fully funded

places for First Nations students”.

It is also used to maintain and improve the campus.

Originally published as Melbourne Grammar, Brighton Grammar, Scotch College pocket $150m in tax-free donations