Australian Philanthropic Services (APS) has announced a record year for charitable giving from its clients in the last financial year. APS clients collectively gave $200 million to charities in FY24, a sizeable uplift from $162 million in FY23.

This announcement shortly follows the release of the Productivity Commission’s Future Foundations for Giving report (“the Report”), which emphasises the role structured giving has played in increasing the availability of philanthropic dollars in Australia.

Structured giving is a systematic approach to charitable donations, often involving significant financial contributions and long-term planning. It utilises trust structures like private ancillary funds (PAFs) and public ancillary funds (PuAFs), enabling donors to make more significant and impactful donations over time.

“The Report confirms the view we have formed through experience — ancillary funds have unlocked philanthropic giving, attracting funds that would otherwise have gone outside of the charitable sector,” said APS CEO, Judith Fiander.

“This is a major win for the community, for charities, and for donors. In addition to record giving amounts, we are seeing record numbers of referrals from financial advisers and accountants, and rapidly growing client numbers,” Ms Fiander continued.

“This situation shows that the legislative and regulatory frameworks developed to facilitate philanthropy are working as intended. Australians are community-minded and charitable people who want to give back thoughtfully; the current frameworks make doing so easy, tax effective, and cost-efficient,” Ms Fiander said.

More discussion needed on Productivity Commission’s reform suggestions

Chris Cuffe, APS’s Founder and Chair, urged caution regarding the Report’s suggestion that the government should review the minimum distribution level for PAFs every 10–15 years. This refers to the percentage of a fund’s assets required to be distributed annually to charities.

“One of the main reasons that ancillary funds work so well is that they provide a sense of stability and certainty to donors looking to leave a philanthropic legacy for posterity. They want to know what the fund will be doing in ten, even fifty years’ time,” Mr Cuffe said.

“Tinkering with the rules every decade would undermine the principles of stability and certainty — principles that the Productivity Commission have cited as being fundamental to the success of the current framework,” Mr Cuffe said.

“We welcome the Report’s suggestion that privacy arrangements for PAFs remain unchanged and that annual minimum distribution requirements be smoothed over three years to allow for large capital investments in one year,” Mr Cuffe remarked.

Accessible entry point for public ancillary funds is impactful

 “While most of the uplift has come from private ancillary funds, public ancillary funds (such as the APS Foundation) are also growing exponentially. This is thanks to public funds’ more accessible entry point of $40,000, compared to the $1 million required to establish a private fund,” Ms Fiander said.

“Thanks to the growth we’ve seen across all kinds of structured giving, we believe that the philanthropic sector is on track to double giving by 2030,” Ms Fiander concluded.

Published 24 July 2024