Private Ancillary Funds (PAFs)

Effective 1 October 2009, Prescribed Private Funds (PPFs) are now known as Private Ancillary Funds (PAFs), with the commencement of the new regulatory regime. Please note that some relevant content may still refer to PPFs; we will be updating this content in due course.

A prescribed private fund (PPF) is a fund established by trust instrument to which businesses, families and individuals can make tax deductible donations. It is prescribed by law. The fund may make distributions only to other deductible gift recipients that have been either endorsed by the ATO or are listed by name in the income tax law. There is no need for gifts to a PPF to be sought and received from the public, and a PPF can be controlled by an individual, family or corporate group.

The first PPFs were established in 2001; as of 1 July 2008 there were 768 PPFs approved by Government. These funds have a corpus of some $1.2 billion and made grants of $117 million to other charitable organisations in the year ending June 2007.

Philanthropy Australia is eager to assist the growing number of PPFs being established in Australia, and is working constantly to develop support networks and research around their practice.

Visit our special PAF Website designed for those who have established a PAF, would like to do so, or are wondering whether a PAF is right for them.

PPFs will find Membership with Philanthropy Australia beneficial for the following reasons:

• The opportunity to participate in the wider philanthropic community, including our PPF Network, allowing members to discuss issues and concerns relevant to PPFs, and to share information and learn from one another's experience
• Access to resources, information and research via our Resource Centre, including information on effective grantmaking strategies
• Information on current news and events via our membership newsletters, including Pressing Matters, a weekly media round up; Philanthropy Review, a monthly e-communication; and Australian Philanthropy, our journal which is published three times a year.

Please contact us if you'd like to discuss any issues with regards to establishing or operating PPFs:

Louise Burton
l.burton@philanthropy.org.au
(02) 9223 0155

Bruce Argyle
b.argyle@philanthropy.org.au
(03) 9662 9299

 

Other resources relevant to PPFs include the following:

Tax Office overview of PPFs
The ATO's website on PPFs includes guidelines and a model trust deed.

Ancillary Funds and Prescribed Private Funds
PPFs are a special type of DGR and as such there are special regulations governing the types of  organisations they can fund.  Freehills produced a paper in September 2005 that provides important explanatory information for trustees and staff of PPFs.

The Importance Of Small Foundations
The Association of Small Foundations (ASF) is a membership body for small grantmaking foundations in the USA. Its members generally have no more than two paid staff members, and half are operated entirely by volunteer trustees. The Association provides services to its members including research and advice, events and a regular newsletter.

The ASF has a useful section on its website entitled "The Importance Of Small Foundations" which contains a number of stories and essays relating examples of the contribution made to the community by small foundation in the USA . Small Australian foundations, including PPFs, might find inspiration and some good ideas in these stories.

Raising Children with Philanthropic Values 
This resource aims to provide practical guidance, perspective and action steps for parents who are seeking to encourage charitable attitudes and behaviour in their children (whether they be pre-school age or in their early 20s). This publication is available to download in PDF format free of charge from the TPI web site.

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