How to Be as Charitable as Possible With Less Effort

Posted on: 27 June 2017

If you are philanthropic in nature, you will always be looking for ways to donate money to your favourite charities. As the tax authorities often permit such giving to be offset against your annual liabilities, it makes sense to consider all of the various options open to you. Are you aware of public ancillary funds? How can this type of vehicle help you to help others, while maximising your tax advantage and cutting down on your administrative burden?

Simplicity With Full Deduction

The beauty of this type of fund is that it allows you to take a planned approach to your philanthropic strategy. It's also far less work and less complex than setting up your own private fund. The public ancillary fund is handled by a central trustee, who looks after its governance and all investment strategies. All you need to do is consider which charities you would like to support.

When you pay money into a public ancillary fund you will get a full tax deduction for the money that you contribute, upfront. These funds operate as aggregators and can offer investors a way to contribute to a charitable foundation vehicle, without the amount of money necessary to set one up privately.

Using a Sub Fund

When you contribute as a new donor, you will simply open a new sub fund. This can be established immediately and doesn't cost you anything to do so. There is another advantage as well. If you are thinking about setting up your own private ancillary fund in the future, you can initiate a sub fund and request that the balance be transferred into your own fund later. While the tax commissioner will need to give his permission, it's still far easier than trying to get the necessary approvals upfront from various entities to set up your own private fund.

Promoting Your Philanthropy According to the Rules

A number of different rules are in place whenever you open a private fund, but these restrictions are typically handled by the trustees of a public ancillary fund. You can still reference your identity so that your charitable contributions are made known when using a public fund by attaching a specific name to your sub fund.

Getting a Full Briefing

If you want to understand all the subtle differences between private and public funds, get in touch with an accountant who specialises in this type of charitable investment vehicle.