Payroll giving booms
Another powerhouse in philanthropy today is workplace giving. Otherwise labelled ‘pre-tax payroll giving’, the concept celebrated its 10th birthday in Australia in 2012 with significant findings.
ATO figures from June 2012 (comparing FY10 to FY11) revealed a 34 per cent increase in total donations (excluding employer matching), from $28 million to $37.5 million, a 19.5 per cent increase in the number of employers involved and a 56.5 per cent increase in the number of employee donors.
Workplace giving champions The Australian Charities Fund and Charities Aid Foundation have helped hundreds of employers set up programs over the past 13 years, resulting in more than $190 million in donations to the community sector.
Both groups have long promoted the notion that if 10 per cent of working Australians made a payroll charity donation of $5 each week, it would generate $260 million for the Australian community each year, providing a more reliable income stream for charities and greatly reducing their fundraising and administrative costs.
[breakoutbox][breakoutbox_title]Ancillary funds – public v. private[/breakoutbox_title][breakoutbox_excerpt]Australian Philanthropic Services, which provides both a public fund and also advises on private funds, offers the following synopsis to help advisers understand the often-confusing Private Ancillary Fund (PAF) and Public Ancillary Fund (PUF/PuAF) models.[/breakoutbox_excerpt][breakoutbox_content]Australian Philanthropic Services, which provides both a public fund and also advises on private funds, offers the following synopsis to help advisers understand the often-confusing Private Ancillary Fund (PAF) and Public Ancillary Fund (PUF/PuAF) models. CEO Antonia Ruffell explains.
Similarities
– Contributions to the funds are tax deductible for individuals.
– Investment earnings within the funds are income tax exempt and franking credits can be reclaimed.
– Grants from the funds can only go to DGR Item 1 Tax Concession Charities (or a wider range of DGR Item 1 organisations if the fund becomes an Income Tax Exempt Fund).
– The fund’s financial statements and compliance with Legislated Guidelines need to be audited and reported to the ATO annually.
– Administrative penalties apply for non-compliance with Legislated Guidelines.
– New funds must have a corporate trustee.
Differences
– The minimum per annum amount to be granted to charities from a PAF is 5 per cent of opening fund value, while for a PUF/PuAF it is 4 per cent.
– A PAF is restricted in accepting money from non-associates of the founder (no more than 20 per cent of the fund value in any one year.
– PUF/PuAFs must be controlled by a board with a majority of Responsible Persons, whereas a PAF trustee can be controlled by family members but is required to have one
– Responsible Person who is independent of the founder and his/her family.
– A PUF/PuAF can and must solicit funds from the public, while a PAF must not.
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Back to basics
Whether it’s through a direct community partnership, creation of a sub-fund with a public fund or community foundation, or establishing your own private foundation, Meachen reminds businesses that clear priorities will lead to a greater level of satisfaction and social impact.
“It’s important to define the business values clearly and find a strategy that aligns with them,” she says.
“It’s just as important to ensure you are realistic about the needs of the community in which you intend to make a difference and the potential you have to make an impact, given the resources and knowledge you have access to.
“Talking to your business stakeholders is very important, as is identifying the concerns of the community and how they feel you could best be helping. Community foundations can be very useful sources of information and knowledge here, as can the community organisations that may be potential recipients of your grants.”
