Private Ancillary Funds (PAFs): Making Your Giving Go Further

Written by Steve Landers & Shara Cox

For many of us, giving back is important, but figuring out the best way to make a lasting impact can be tricky. That’s where a Private Ancillary Fund, or PAF, can help. A PAF is a type of charitable fund that lets you plan your giving in a personalised, structured way while keeping control over how and when your donations are made.

What is a Private Ancillary Fund?

A PAF is essentially a personal charitable fund set up to support eligible charities. It’s private, meaning you (and your family, if you wish) are in control of the fund, and it can continue operating for years, even after you’re gone.

Why Clients Choose a PAF

1. Make a bigger impact over time
Money in a PAF can be invested, giving it the potential to grow before it’s donated. This means your giving can go further and support causes for years to come. For example, if your fund earns 7% and then you donate 7%, you still have the same starting balance to continue to donate in the future.

2. Flexibility and control
With a PAF, you decide which charities benefit, how much you give, and when. You can also involve family members, teaching the next generation the value of philanthropy.

3. Tax benefits
Contributions to a PAF are generally tax deductible, helping you manage your finances while supporting causes you care about. Annual contributions can have significant tax benefits for all family members.

4. Leave a lasting legacy
A PAF isn’t just about today - it can form part of your long-term estate plan, helping to leave a charitable legacy that reflects your values.

Things to Consider

While PAFs are a powerful tool, they do have some requirements, such as:

  • Giving at least 5% of the fund’s assets each year to eligible charities

  • Following governance and reporting rules set by the Australian Taxation Office

These obligations make PAFs best suited for those who want to make long-term, strategic giving a part of their financial plan.

Is a PAF Right for You?

A PAF might be suitable if you:

  • Want to make meaningful, ongoing donations to charity

  • Are interested in involving family in philanthropy

  • Want to manage the timing and recipients of your giving

  • Are looking for a tax-effective way to support causes you care about

Ready to make your giving go further?

If you’d like to explore whether a Private Ancillary Fund could be right for you, contact us today. We can guide you through how it works and help you create a plan that reflects your values and your vision for the future.

Jenni Anderson