Getting started

You might be considering giving as an individual, a family, a community or as a business. No matter who you are, it is important to understand what type of structure will suit you best, or if you need one at all. 

The main things to consider are:

  • How much you intend to give
  • The time-frame for your giving
  • The level of engagement you want as the donor


You might not need to set up a philanthropic structure if:

  • You are giving a one-off amount
  • You are giving for a short-period
  • You are giving a relatively small amount each year (e.g. less than $10,000)
  • Tax deductibility isn’t required
  • It’s easier for you to give a tax deductible donation directly to a charitable organisation


If you are going to set-up a philanthropic structure, these are some of the options available to you:


Which philanthropic structure is right for me?

The legal, financial and operational requirements and the cost of your giving program are influenced by the type of structure you set up, so it is important to choose one that will work for you. Please contact us if you would like initial guidance establishing a structured, strategic approach to your giving. Philanthropy Australia offers a large range of formal and informal ways to enhance your giving.

Learn more about Philanthropy Australia membership

 



Sub-fund in a Public Ancillary Fund (PuAF) 

This might be a community foundation or a charitable trust fund run by a not-for-profit, Trustee Company or wealth adviser.

A PuAF must be controlled by a committee the majority of which are “Responsible Persons” (people with a degree of responsibility in the community) under the Public Ancillary Fund Guidelines 2011.  

Grants or donations from the PuAF can only be made to charitable organisations that are endorsed as DGR Item 1 by the Australian Taxation Office. Sub-fund donors can have an individually named account to which their tax deductible donations are credited and they may make recommendations on the organisations to receive distributions of grants from that account. There is usually an annual minimum distribution requirement  of 4% (of the net value of the fund at 30 June the previous year). 

Public Ancillary Funds Guidelines


Private Ancillary Fund (PAF)

A Private Ancillary Fund (PAF) is a trust fund for businesses, families and individuals and set up under the Private Ancillary Fund Guidelines 2009. The trust fund is controlled by a company usually with family members as directors and at least one independent “Responsible Person” director (someone with a degree of responsibility in the community). 

Family members can make tax deductible donations but PAFs cannot solicit funds from the public. Grants or donations from the PAF can only be made to charitable organisations that are endorsed as DGR Item 1 by the Australian Taxation Office. There is usually an annual distribution requirement of 5% (of the net value of the fund at 30 June the previous year). 

Private Ancillary Funds Trustee Handbook
 

Testamentary or Will Trust

These trusts are the established by the will of the benefactor and do not come into operation until after his/her death. They can attain income tax exempt status as a tax concession charity from the ACNC but donations to them are not tax deductible. They must fund the charitable purposes specified in the will.
 

Private Charitable Trust

These trusts are established by a donor through a deed with a charitable purpose. They can attain income tax exempt status as a tax concession charity from the ACNC  but donations to them are not tax deductible. They must fund the charitable purposes specified in the deed.
 

Companies

Some foundations that operate grant making through a public fund are public companies limited by guarantee.  Usually a charity, the legal responsibilities of directors are determined by the ACNC legislation.
 

Gift Fund

If you wish to establish a foundation which is principally to collect donations for the financing of a single organisation, the type of organisation you need to establish is a Gift Fund. You can find more information on Gift Funds on the ATO website.

Consultancy Service

Designed for members and non-members to support more and better philanthropy in Australia.

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