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PHILANTHROPY


all the investment and administration taken care of by the Community Foundation or other provider. Contributions to these funds are usually tax- deductible. Ö A Private Ancillary Fund (PAF). Contributions to PAFs are also usually tax-deductible, while control of the PAF rests with a trustee, which is usually a simple company with majority of family members on the board (but with at least one independent director who meets the Responsible Person criteria set out by the Australian Taxation Office). All investment, administration and distribution decisions therefore remain effectively with the family.


Aligning motivation with structure There are some consistent themes that make the decision path relatively straightforward for many individuals or families in Australia: ƒ While tax considerations should not initiate giving, for many people the opportunity to give in a tax-effective manner will be a determinant of how much and when they give. DGR charities and DGR funds, either a PAF or Community Foundation subfunds, are therefore the preferred choice in such circumstances. ƒ Individuals who want to see immediate benefit to a specific organization or cause will be inclined to make gifts directly to those charities. ƒ Individuals who are focused on leaving a legacy and are not concerned about income deductibility will incorporate a bequest in their will. ƒ Individuals who want to give now (often motivated by the sale of a business, large bonus or windfall gain and the tax consequences thereof) but are not sure who


to give to or want their giving spread over a number of years, will tend towards a PAF. ƒ Individuals who want to actively engage with the organizations they are supporting and want that to be ongoing over several years will usually tend towards a PAF or subfund. ƒ Individuals with limited financial resources but who want to establish a foundation and are comfortable to leave the investment and administration to professionals will tend towards “subfunds”. ƒ Individuals with more financial resources to commit ($500,000+) and who want to have the option to be fully involved in all aspects of the foundation, including the investment and grant making aspects, will prefer a PAF. While these generalities cover many individual


and family circumstances, there can be significant variations, in particular because not all members of a family see things the same way. Also, there may need to be some tradeoffs if objectives and structures don’t fully align. In these circumstances, working with a specialist philanthropic adviser, such as SVA, is important. SVA is a non-profit organization investing in social


change by helping increase the impact and build the sustainability of those within the social sector. As part of its suite of services, SVA operates a Private Ancillary Fund Service, designed to increase the profile of philanthropy in Australia and grow Australia’s giving levels.


David Ward, Director PAF Service, Social Ventures Australia (SVA), spent the majority of his career with ANZ, including four years as Managing Director of ANZ Trustees, which administers over 200 charitable trusts. David is on the Council of Philanthropy Australia and has written two trustee handbooks for Philanthropy Australia, including the Private Ancillary Fund Handbook and conducts Philanthropy Australia’s Governance seminars.


$500,000 THE LEVEL OF


PHILANTHROPIC TRUST CONTRIBUTION AT WHICH INDIVIDUALS SHOULD PARTICIPATE


IN PRIVATE ANCILLARY FUNDS


FAMILY OFFICE: ASIA TOMORROW


99


OPERATIONS


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