Set Up Your Own Family Foundation or Fund

Setting up your own Foundation or a Fund is a good, tax effective way of committing to philanthropy.

Key features include:

  • Donors receive a tax deduction for donations, which can claimed immediately or spread over five years.
  • Earnings are income tax exempt with franking credits allowed.
  • Distributions are made to charities with Deductible Gift Recipient (DGR) status, and a minimum of 5% of the value of the fund must be distributed each year. PAFs are governed by Australian Taxation Office (ATO) Guidelines and have Australian Charities and Not-for profits Commission (ACNC) compliance obligations.

  • There are generally two ‘entity’ options for donors:

  • Public Ancillary Fund (PuAF); or
  • Private Ancillary Fund (PAF).

  • Public Ancillary Fund (PuAF) – a ‘sub Fund’

    A Public Ancillary Fund is generally a pool of funds contributed by many families, which is fully managed by a professional organisation. Your contributions are regarded as a ‘sub Fund’ of a larger pool of funds (‘the Fund’). It is a bit like having your super in an industry super fund. Someone does all the compliance and investment work for you – but you still get to choose where you want your sub Fund money to be granted (ie. the charity you wish to support).

    A PuAF is most suitable for a family that wishes to donate initially up to $1M , although some families donate larger amounts. A PuAF is very convenient, and a good ‘first step’ in your philanthropy journey.

    Private Ancillary Fund (PAF) - a Family Foundation A Private Ancillary

    Fund is the best option where the family wants to ‘self-manage’ the investments of the fund held. For this reason, a Foundation, or PAF, is only suitable where $1M or more is held and the founders have the time to give to the running of the Foundation.

    Other key features of a PAF include:

  • A PAF is a charitable trust controlled by a company as trustee and the board is usually comprised of family members. It must contain at least one independent director (the ‘Responsible Person’); and
  • The investment strategy for the Foundation is set by the directors.
  • It is recommended that if you establish a PAF, you consider having the Foundation’s administration professionally managed.

    More Information

    Interested in finding out more? We suggest you contact an organisation that professionally manages sub Funds and Foundations. We recommend Australian Philanthropic Services:


    Address: Level 5, 8 Spring Street, Sydney NSW 2000

    Phone: (02) 9779 6300


    If you do set up your own Foundation, we would love to hear from you. Contact us at