Setting up a Private Ancillary Fund (PAF) involves navigating a complex range of compliance requirements. For those aiming to make a significant and lasting impact through philanthropy, understanding who can assist in establishing and managing a PAF is crucial. This guide outlines the key partners who can support you in this process.
Role of a Responsible Person: A ‘responsible person’ plays a critical governance role within a PAF. Typically from a professional background with a duty of care to the community—such as a lawyer or an accountant—this individual ensures the PAF’s operations are transparent and adhere to governance standards. Their oversight is vital in maintaining public trust and fulfilling regulatory obligations, with at least one ‘responsible person’ required on the board to enhance the fund’s accountability and integrity.
Accountants
Accountants are critical in managing a PAF effectively. They oversee the setup and daily administration, providing performance reports and ensuring financial strategies align with your philanthropic goals. Their role extends to managing compliance tasks, such as submissions for the ATO Annual Information Return and Application for Refund of Franking Credits. Accountants can also coordinate with charities and conduct research to maximise the impact of contributions, preventing financial missteps and ensuring the fund’s sustainability.
While accountants are essential for financial oversight, a considered investment strategy requires collaboration with an investment manager.
Lawyers
Lawyers can provide legal support for PAFs by supplying trust deeds, maintaining documentation such as trust registers and minute books, and guiding trustees—especially those serving as ‘responsible persons’. Lawyers also manage complex issues like ATO audits and penalties and ensure all transactions meet regulatory guidelines.
When working with your Lawyer, you will need to partner with an accountant and investment manager to fulfil all the compliance obligations of a PAF.
Investment Managers
Investment managers develop and oversee your fund’s investment strategy, ensuring it aligns with ‘prudent person’ investment principles. They ensure your investments are strategically managed to optimise returns while maintaining the necessary liquidity for annual charitable distributions. Effective financial planning helps maximise the impact of your contributions and ensures the sustainability of the fund.
When working with your preferred investment partner, it’s important to work alongside an accountant to ensure compliance and auditing standards are met.
Your Full Service Partner
While setting up a Private Ancillary Fund involves multiple stakeholders, partnering with a full-service firm like The Giving Advisory can simplify this complex process. We provide end-to-end support, integrating financial and compliance expertise under one roof. Our team not only helps establish your PAF but also ensures its ongoing management aligns with both your philanthropic vision and regulatory requirements.
This approach allows you to focus on what truly matters—making a significant impact through your charitable goals.