Choosing the right philanthropic structure is less about complexity—and more about clarity. Whether you’re giving as an individual, family, or through a business, the structure you select should reflect how you want to give, who you want involved, and how you envision your impact over time. It’s not about finding the most sophisticated model, but the one that supports your long-term goals, offers the right level of control, and delivers the administrative and tax efficiencies that matter. With the right foundation in place, your giving becomes more than a gesture—it becomes a lasting legacy.
Key Considerations When Selecting a Structure
Before choosing a legal or governance framework, it’s important to consider your goals, resources, and how actively you wish to participate in managing your giving.
1. Purpose and control
Do you want to fund a specific cause or support a broad range of registered charities? Will you be involved in grant-making decisions or delegate that responsibility?
2. Tax efficiency
Some structures provide immediate tax deductible benefits and ongoing tax concessions for income earned within the fund. This can maximise your giving potential over time.
3. Regulatory obligations
Structures differ in their annual reporting and compliance requirements. Consider whether you’re prepared for regular audits, board oversight, and adherence to specific regulations.
4. Family involvement
If you wish to involve your family in long-term philanthropic efforts, choosing a structure that allows shared governance and succession planning is important.
5. Investment management
For structures that hold capital, your chosen investment strategy must balance risk, return, and the ability to meet annual giving obligations.
Common Philanthropic Structures in Australia
Australia offers several legal structures suitable for charitable giving. Each option varies in terms of setup complexity, oversight, and flexibility.
1. Private Ancillary Fund (PAF)
A Private Ancillary Fund is a type of charitable trust that enables families, individuals, or businesses to give in a structured and strategic way. A PAF requires a trust deed, must distribute a minimum percentage of its assets annually to Deductible Gift Recipient (DGR) organisations, and enjoys generous tax concessions. It’s suited to those who want control over their giving, a long-term approach to investment, and the ability to build a legacy.
PAFs must adhere to ACNC and ATO regulations, including governance standards, investment rules, and annual reporting. While setup and compliance may be more involved, the benefits of tax efficiency and control often outweigh the complexity.
Learn more about establishing a PAF and how The Giving Advisory can assist.
2. Public Ancillary Fund
A Public Ancillary Fund is also a charitable trust, but it is designed to receive donations from the public rather than a private source. It is generally managed by a not-for-profit organisation and must distribute funds to eligible DGRs. It’s ideal for those looking to pool resources and support multiple causes, with less desire for hands-on control. While tax deductible benefits still apply to donors, decision-making is typically handled by a board or trustee committee.
3. Charitable Company (Company Limited by Guarantee)
A company limited by guarantee is a common structure for charitable entities that operate as not-for-profit organisations. This model is suited to groups that intend to run charitable services or programmes directly rather than simply fund others. It has a formal governing document (the constitution), and is registered with the ACNC and ASIC. While this structure allows for operational control, it also requires strict compliance, a board of directors, and robust governance procedures.
4. Testamentary or Family Trusts with a Charitable Purpose
In some cases, individuals choose to use a trust deed to create a philanthropic legacy through a family or testamentary trust. While these may not always qualify for tax deductible donations or DGR status, they offer flexibility and privacy, particularly for those giving across state and territory borders or internationally. Careful structuring is required to ensure they remain compliant and aligned with philanthropic intentions.
Now What
The best philanthropic structure is one that aligns with your vision, resources, and the level of involvement you desire. Whether you’re exploring a Private Ancillary Fund, a Public Ancillary Fund, or setting up a company limited by guarantee, the structure you choose will shape the way you give, govern, and grow your impact.
At The Giving Advisory, we help individuals, families, and organisations navigate the legal, tax, and compliance requirements of setting up the right structure. We’ll guide you through selecting the most suitable framework, drafting your governing document, managing annual reporting, and creating a strategy that ensures your philanthropy is both effective and enduring.