Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 115

Last minute tax deductions in a public ancillary fund

Although it’s only days until the end of the financial year, there is still time to establish a tax deduction by establishing a sub-fund within a public ancillary fund, such as the Australian Philanthropic Services Foundation. Unlike a private ancillary fund (PAF), there is no requirement to establish a new trust or trustee company, so a sub-fund within a public ancillary fund can be established immediately, and there’s no set-up cost to do this.

(Declaration of interest: I am the pro bono Chairman and Founder of Australian Philanthropic Services (APS), a not-for-profit organisation which sets up and administers private ancillary funds and public ancillary funds as well as providing grantmaking advice. See this link for more details).

What is a public ancillary fund?

A public ancillary fund is a philanthropic structure that allows a planned approach to charitable giving. Amounts donated by you to your own sub-fund within a public ancillary fund are immediately tax deductible, while donations to eligible charities from your sub-fund can occur over many years.

The ATO has a fact sheet for public ancillary funds here.

The benefits of public ancillary funds include:

  • Simple – the fund has the administration, investment and governance activities as the trustee, leaving donors solely to think about the charities they would like to support.
  • Taxation benefits – the money donated into a sub-fund is tax deductible in the year of the donation and the fund is a tax exempt structure, so the philanthropic dollar goes further.
  • Portability – in certain circumstances, it’s possible to transfer assets from a public ancillary fund into a private ancillary fund, or PAF.
  • Naming – the sub-fund can have a specific name, such as a family name, and grants to charities from the sub-fund will refer to this name. Anonymous grants are also possible.

Public and private ancillary funds are growing rapidly and becoming the preferred philanthropic structure for wealthier Australians.

There are a few things to consider when comparing public ancillary funds:

Grantmaking and choosing a charity

Last year, APS surveyed clients about the challenges and satisfaction they experience in giving away money. The responses and needs identified were varied, reflecting the diverse and personal nature of private philanthropy. The biggest challenge identified across the board however, was deciding which charities to fund.

Charities supported from a public ancillary fund must have DGR Item 1 status, of which there are around 25,000 in Australia.

In choosing a charity, many clients want to know that their donation makes a real difference.

It is important to note that there is no right or wrong way when it comes to giving. While some will approach it more scientifically, for others it’s the act of giving itself that is important. For most, grantmaking is a journey that evolves and changes over time.

Here are a few key things to consider:

  • Work out what you want to achieve. The more specific you are, the easier it is to work out whether you’ve made any progress. Who do you want to help? Where? What kind of approach resonates most with you?
  • Less is more. You can’t solve all the problems of the world. Choose whichever issue you feel most connected to, and leave the rest to others.
  • Make sure that the organisation you want to support has clear goals defined, and is measuring their progress towards achieving these goals.
  • Ask yourself is it more important to you to reach a certain, sizable number of beneficiaries, or hear individual stories and know that you’ve made a tangible difference in the lives of a few?
  • Decide whether you are okay with a change of plan and lessons learned from the process, or would you consider the project a failure if it didn’t achieve the outcomes as planned?
  • Keep in mind that building the capacity of a charity may be another valuable way to support a charity: measuring impact (evaluation), fundraising, and effective management (administration) also cost money.

APS offers services to assist clients with grantmaking, but obviously for this financial year, anyone interested will need to move quickly. For next financial year, the best results come from getting started early to identify your philanthropic goals and learn about your areas of interest and the charities you might want to support.

 

Chris Cuffe is co-founder of Cuffelinks and Chairman and Founder of Australian Philanthropic Services. This article is for general education purposes and does not address the specific circumstances of any individual investor.

For more details, contact [email protected].

 

  •   26 June 2015
  •      
  •   

 

Leave a Comment:

RELATED ARTICLES

Maximising the impact of charitable giving

Charitable giving and tax deductions

The $1 billion quiet achiever in Australian philanthropy

banner

Most viewed in recent weeks

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

Has Australia wasted the last 30 years?

The 20 years after Peter Costello left Treasury have been deemed wasted...by Peter Costello. The missed opportunities for Australia began long before.  

The 5% deposit scheme is bad for homeowners and Australia

An ‘affordability’ scheme making the county more vulnerable to economic shocks and contributing to the deteriorating financial situation of everyday Australians.

3 ways to defuse intergenerational anger

With the upcoming budget increasingly likely to include bold proposals to alter the tax code I’ve outlined three incremental steps with fewer unintended consequences.

Navigating the next stage of life in retirement

Retirement planning is more than just saving enough money. Long-term care needs, housing choices, and social networks are just as critical for a happy and enjoyable life.

Latest Updates

Superannuation

Indexation implications – key changes to 2026/27 super thresholds

Stay on top of the latest changes to superannuation rates and thresholds for 2026, including increases to transfer balance cap, concessional contributions cap, and non-concessional contributions cap.

Economy

Central banks need higher inflation targets

In a shift away from solely targeting low inflation, central banks are considering raising inflation targets to combat economic challenges, but face potential drawbacks and conflicts in policy implementation.

Exchange traded products

The missing 30%: how LIC returns are understated, and why it matters

The perceived underperformance of LICs compared to ETFs is due to existing comparison data excluding crucial information, highlighting the need for proper assessment and transparent reporting.

Latest from Morningstar

Alpha isn’t dead. You’ve just been measuring it wrong

New research shows smarter portfolio construction—not new factors—is the real edge in the hunt for alpha. However, finding it requires a fundamentally different mindset.

Investment strategies

The diversification illusion: why 'balanced' portfolios may be exposed

Many 'diversified' portfolios are increasingly driven by the same narrow set of forces. As concentration builds beneath the surface, understanding how portfolios behave - not just how they’re constructed - is critical for investors.

Investment strategies

The case for staying the course in credit

Rising oil prices and inflation pushed Australian yields higher. Markets expect further tightening, but weaker growth may reverse rates. Locking income and maintaining duration is a sound strategy for widening credit spreads.

Investment strategies

One risk after another

Investors often focus on front-of-mind risks, reacting to each headline event without considering long-term impacts. Cass Sunstein and Timur Kuran define this as an "availability cascade," affecting financial decision-making.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.