The Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) released an information sheet in 2021 that examined ATO data from 2018-19 about ancillary fund activity.
“In total, as at 30 June 2019, there were 3,090 ancillary funds, with combined net assets of $10.33 billion. They received $1.39 billion in donations in the 2018–19 year and distributed $967 million in grants.”
What is an ancillary fund?
The ACNC states: “Ancillary funds are special funds that provide a link between people who want to give (‘donors’) and organisations that can receive tax deductible donations as deductible gift recipients (DGRs). Ancillary funds are set up for the purpose of providing money, property or benefits to DGRs. There are two types of ancillary funds that fall within a DGR category:
- private ancillary funds, and
- public ancillary funds.”
Private or public
Private ancillary funds (PAFs) are most commonly used by families or other close groups that want to make combined donations to their chosen DGRs. ACPNS says, “PAFs allow families, businesses and individuals to create a tax-effective giving structure.” While the donors don’t necessarily have to be from a single family, there is usually a relationship between the members and they have a united philanthropic goal. PAFs are not open to the public and cannot solicit donations outside their family group. Public ancillary funds (PubAF), on the other hand, are used for public fundraising activities.
Why set up an ancillary fund?
There are numerous reasons why someone might set up an ancillary fund. A not for profit organisation could create a PubAF in order to facilitate efficient fundraising or provide donations to other connected DGRs. An individual might set up a PAF in order to have a foundation that continues to donate after they have died. A PAF can also enable the next generation to be easily involved in the family’s philanthropy.
Connecting with an ancillary fund
If your not for profit organisation is seeking funding, it could be worth trying to connect with an ancillary fund. There are numerous avenues you could take, such as starting with information on the Philanthropy Australia website. They outline the steps you need to take and also have details about other funding sources. You could also consider engaging the services of a fundraising strategist as they often have connections with various funding channels.
