The Queensland University of Technology, Australian Centre for Philanthropy and Nonprofit Studies (ACPNS), has released its annual information sheet on the latest financial data by the Australian Taxation Office (ATO) on Private and Public Ancillary Funds. The reports indicate that despite a slowing in the growth of the sector overall since the previous reporting period, these funds are active in their contribution and distribution of funds.

What is an ancillary fund?

Ancillary funds are important philanthropic vehicles that provide money, property or benefits to doing organisations (typically charities) with deductible gift recipient (DGR) endorsement. Private and Public ancillary funds raise funds either from private donors or the public respectively, and have annual minimum distribution requirements they must comply with. Basically, ancillary funds provide a link between people who want to give ('donors') and DGRs. Though we note ancillary funds cannot give to other ancillary funds except in very limited circumstances.

Number of ancillary funds

There has been a steady increase in the net number of Private Ancillary Funds since 2011. However, the number of new Private Ancillary Funds established during the 2018 - 2019 period is down 30 per cent from the previous year.

The net number of Public Ancillary Funds hasn’t experienced the same growth, with a slow decline in the net number since 2011. Some analysis from Philanthropy Australia suggests that this could be attributable to the Australian Charities and Not-for-profits Commission (ACNC)’s increased focus on cleaning up the Register of Charities to ensure that inactive organisations are deregistered, since the ACNC’s establishment in December 2012.

The number of new Public Ancillary Funds approved has also dropped in 2018 - 2019, with a 6 per cent decline from the previous period.

Donations and distributions

While donations made to Private Ancillary Funds in the 2018 – 2019 period decreased by 46 per cent from the previous year, distribution of funds made by those ancillary funds nevertheless increased by 43 per cent over the same period. Distributing $564.58 million in grants, these distributions accounted for 8 per cent of total fund assets, 3 per cent greater than the 5 per cent annual minimum requirement for Private Ancillary Funds.

The types of DGR organisations that have received increased donations from Private Ancillary Funds include, cultural organisations, education, environment, fire and emergency services, health, research, sports and recreation, and welfare and rights.

Donations received by Public Ancillary Funds grew by 24 per cent over 2018 – 2019, and distributions of those funds also increased by two per cent. In that reporting period, Public Ancillary Funds distributed $402.33 million, accounting for 13 per cent of their total assets and 8 per cent above the distribution requirement of 4 per cent.

Public Ancillary Funds increased distributions to the following DGR organisations, cultural organisations, health, international affairs, family, and sports and recreation.

This data will serve as an interesting benchmark to assess the philanthropic sector’s financial position and activities over the 2019 – 2020 Australian ‘Black Summer’ bushfire season and onwards into the  COVID-19 outbreak over 2020 – 2021. For more information you can download the ACPNS information sheet from the QUT website or access the dataset directly from the ATO website.