Private Ancillary Funds
(PAFs)

A PAF is a charitable trust that is a tax effective and strategic structure to grow and manage your philanthropy.

We have first-hand knowledge and experience in establishing and operating PAFs so you can leave the paperwork to us while you focus on where you want to see the most impact from your donations.

Donations to a PAF are tax deductible and are invested in a tax-free structure. Earnings are distributed annually to charities of your choice to meet the minimum distribution requirements.

Why use a PAF?

A Private Ancillary Fund (PAF) is a tax-effective way of giving that allows you to contribute today while deciding which charities will benefit in the future. It can provide sustainable funding to charities, helping create greater long-term impact, while investments made in a tax-free environment can grow and maximise the funds available for distribution. A PAF also provides an opportunity to build a lasting legacy of generosity for future generations.

A Brief History
Private Ancillary Funds (PAFs) were introduced by the Australian Government in 2009 to encourage structured private philanthropy and provide a tax-effective vehicle for individuals and families to support charitable causes. Prior to their introduction, Australia lacked a dedicated structure for long-term private charitable giving. Since then, PAFs have become an important part of the philanthropic landscape, with 2,196 registered PAFs operating across Australia in 2023.

Collectively, private funds have distributed more than $5.2 billion to charitable organisations since 2001, and recent government reforms and reviews are focused on doubling philanthropic giving across Australia by 2030.

Annual obligations we assist with…

Preparation of annual financial
statements and audit

Lodgement of tax return

Responsible person requirements

Submission of Annual Information
Statement to ACNC

Updating investment strategy in conjunction with your trusted financial advisor

Ensuring minimum distribution
requirements are met

Your first steps to a greater legacy

  1. Onboard
    Complete onboarding paperwork with
    Mission Advisory

  2. Institute
    Establish trustee company

  3. Implement
    Setup PAF deed and supporting documentation

  4. Register
    Apply for approvals and registrations with the ACNC and ATO

  5. Start Sowing
    Make initial contribution

Real Clients.
Real Examples.
Real Impacts.

As specialists in philanthropy and charitable giving, Mission Advisory works closely with clients to establish and manage Private Ancillary Funds that align with their values and goals. The following real-life examples demonstrate the flexibility of PAFs and the positive impact they can have for both donors and the charities they support.

Turning Tax into Impact
Following the sale of a business, a donor used a Private Ancillary Fund to redirect a significant amount into charitable giving rather than tax. The fund's investments continue to generate returns, allowing annual distributions to charities while preserving and growing the capital base for future giving.

Building a Family Legacy
A family established a $4 million PAF after a major financial event, creating both a tax-effective outcome and a long-term giving strategy. Over time, family members became involved in grant-making decisions, helping build a shared legacy of generosity across generations.

Starting Small, Giving Meaningfully
A donor established a PAF with $350,000, demonstrating that meaningful philanthropy does not require a multi-million-dollar fund. With modest administration costs and the potential for investment growth, the fund continues to support charitable causes while building its capacity to give over time.

Make a lasting impact,
in a tax effective way.
Contact Mission Advisory
to find out more.

Contact Us

Private Ancillary Fund (PAF) FAQs

  • A Private Ancillary Fund (PAF) is a type of charitable trust that allows individuals, families, or businesses to manage their philanthropic giving in a structured and tax-effective way. It acts as a vehicle for making grants to eligible charities over time.

  • PAFs are typically established by individuals, families, or businesses who want to create a long-term giving strategy. They are ideal for those looking to make significant charitable contributions and maintain control over how funds are distributed. They also can be passed on to your children to allow for generational giving.

  • Contributions by you to a PAF are tax-deductible in the year they are made. Additionally, the fund’s investment income is generally tax-exempt, allowing the capital to grow and support charitable causes over the long term.

  • While there is no legislated minimum, PAFs are generally suited for those contributing at least $500,000 or more, as they involve ongoing compliance and administrative costs.

  • PAFs must distribute a minimum of 5% of their net assets to eligible charities each financial year, ensuring that funds are actively supporting charitable purposes. Eligible charities are those that are endorsed as a Deductible Gift Recipient (DGR) by the ATO.

  • Yes. The trustee of the PAF decides which eligible charities receive grants, giving you flexibility to support causes that align with your values. You can give just to one charity or as many as you like. You also have the ability to change the recipients each year, giving you flexibility.

  • PAFs must comply with Australian Taxation Office (ATO) guidelines, including annual reporting, maintaining governance standards, and meeting minimum distribution requirements. A PAF must be audited and lodge a report with the Australian Charities and Not-for-profits Commission (ACNC) each year to maintain its tax exempt status.

  • Setting up a PAF involves creating a trust deed, appointing trustees, and registering with the ATO. We are able to walk you through this process to get a PAF up and running for you.

  • No. Once funds are donated to a PAF, they cannot be withdrawn for personal use. All contributions are irrevocable and must be used exclusively for charitable purposes in accordance with ATO guidelines.

  • A PAF can invest in a wide range of assets, including shares, managed funds, term deposits, and property, as long as the investments are prudent, comply with the trust deed, and align with ATO requirements. The goal is to grow the fund to support charitable giving over time.

  • Yes, a PAF can invest in property as part of its investment strategy, provided the property is held solely for investment purposes and not for private use. All investments must comply with the PAF’s governing rules and ATO guidelines. Note that a PAF must still distribute at least 5% of its net assets, so it will need some liquid cash to distribute.