non-profit-fact-sheets
What is a Public Giving Fund (formerly Public Ancillary Fund)?
Published: January 19, 2024 Last Reviewed: October 21, 2026
Read Time: 9 minutes
Key Takeaways
- Public ancillary funds were renamed public giving funds on 1 October 2026, with no change to the rules that govern them.
- A public giving fund receives donations and distributes them to deductible gift recipients (DGRs).
- Public giving funds must be managed by a corporate trustee and led by recognised community members.
- In 2020, Australia had 3,192 ancillary (now giving) funds, public and private, valued at a total of $10.33 billion.
- Public giving funds must distribute at least 4% of net asset value each year, or $8,800 if that is greater and the fund pays its expenses from its assets. The Government has announced this will rise to 6%.
- Not all giving funds are charities, but they can register with the ACNC if eligible.
On 1 October 2026 the tax law renamed public ancillary funds as public giving funds, and private ancillary funds as private giving funds. The rules that govern them stayed the same: existing funds do not need to be re-established or restructured, and older documents that refer to ancillary funds are read as including giving funds1.
A public giving fund is an entity that receives and distributes money or property to charitable organisations. Public giving funds are run by a company that agrees to assume the role of a trustee. They are typically led by a group of individuals who are recognised in their community as having important responsibilities or positions such as school principal, member of parliament, or doctor. In 2020, Australia had 3,192 ancillary funds (both public and private) on record valued at a total of $10.33 billion. These funds received $2.12 billion in donations the previous year and distributed $871 million in grants to other entities2.
The Australian Charities and Not-for-profits Commission (ACNC) states that the purpose of an ancillary fund is to “provide a link between people who want to give (donors) and organisations that can receive tax deductible donations as deductible gift recipients (DGRs)”. Not every giving fund is a charitable organisation, although it does have the option to register with the ACNC, Australia’s national regulator for charities. If the fund chooses to do so, it must meet certain requirements and criteria.
Public giving funds may be a good choice of structure for those wishing to pursue philanthropic goals. To learn more about how non-profits are regulated in Australia, read this Better Boards fact sheet.
What are giving funds?
The Australian Centre for Philanthropy and Nonprofit Studies defines ancillary funds as “charitable trusts established by deed for the purpose of making grants for public benefit in Australia”3. In Australia giving funds come in two forms. A private giving fund (formerly a private ancillary fund, or PAF) is a charitable trust that accepts tax-deductible donations in a similar way to private family foundations in other areas of the world like the USA. A public giving fund is used for fundraising and community foundations and is intended for use by the public.
With the help of a public giving fund, charitable funds can pool their donations together and evaluate and choose the causes they want to support. This structure can have a strong impact on the community and encourages charities to manage donations and grant making in a responsible way. Public giving funds can receive money, property, and other benefits from families, businesses, and individuals and reallocate them to entities with a Deductible Gift Recipient status. These funds help organisations provide services related to families, culture, health, welfare, research, fire & emergencies, the environment, defence, education, and sports & recreation.
To learn more about deductible gift recipients, read the Better Boards What is Deductible Gift Recipient (DGR) status fact sheet.
How do public giving funds work?
Public giving funds assist other organisations in distributing money needed to run community projects that benefit the public. Australian Philanthropic Services (APS) is an example of a public giving fund. It helps other entities establish a sub-fund through its APS Foundation and offers a tax deduction in exchange for cash contributions donated to that fund. The foundation offers its contributors and beneficiaries two portfolio options, each with its own benefits. Donors can choose which charities to support, and the funds are pooled together and invested by APS Foundation. Returns on investment (which go back into the public giving fund) are exempt from taxation, which allows the investment (donation) to grow.
APS is registered as a non-profit entity and any donations it receives are tax deductible. The organisation sets high standards for reporting and transparency and offer donors information through their online portal. It serves individuals, families and companies who want more structured fundraising activities but may not have the capacity to manage its own financial contributions. Typically, public giving funds require a minimum donation and must agree to reinvest a portion of the balance. For example, the APS Foundation limits investments to $40,000 or more and promises to grant 3% of the balance every year.
The benefit of working with a public giving fund is that they are run by experienced and knowledgeable individuals who have experience managing and giving funds. The funds also offer a more reasonable fee compared to banks, which allows more money to be given to charities. Public giving funds are more transparent and provide critical tools and resources to organisations interested in grant giving. They are highly regulated, making them an excellent way to donate to charity in an ongoing capacity.
Public giving fund legal requirements
According to the Australian Taxation Office (ATO), a trust is only deemed a public giving fund if it complies with its written rules. The guidelines for these rules state that the following must be included:
- The trust was established under a will or instrument of trust for the purpose of money, property, or other benefits to DGRs.
- Each trustee must be a constitutional corporation, or the sole trustee must be the Public Trustee of a state or territory or a trustee prescribed by regulation.
- The trust is also required to ensure that no trustee has revoked the agreement set out in the entity’s guidelines.
- Public giving funds endorsed before 1 January 2012, and private giving funds prescribed before 1 October 2009, may generally keep non-corporate trustees (with certain exceptions).
All Australian giving funds must also meet the requirements for DGR endorsement categories. These include health, education, research, welfare and rights, defence, environment, family, international affairs, sports and recreation, cultural organisations, fire and emergency services, or other giving funds 4.
To receive a DGR endorsement, registered charities must take several steps, including obtaining an Australian Business Number (ABN), operating in Australia, and establishing internal rules for the transfer of surplus gifts and deductible contributions when the organisation winds up.
Frequently Asked Questions
Why did public ancillary funds change their name?
Schedule 7 of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Act 2026 replaced 'ancillary fund' with 'giving fund' throughout the tax law from 1 October 2026. Public ancillary funds became public giving funds and private ancillary funds became private giving funds. The Government chose the new name to reflect the role the funds play in facilitating giving. Existing funds do not need to be re-established or restructured, and references to ancillary funds in existing trust deeds and other instruments are taken to include giving funds.
Are all giving funds charities?
No. Charitable organisations must be registered with the ACNC and meet the legal definition of a charity, and not all giving funds are registered. To be considered a charity, the funds must operate as a not-for-profit entity, have a charitable purpose that benefits the public, remain in compliance with the ACNC Governance Standards, avoid having any disqualifying purposes, and not be an individual, political party or government entity.
What is the definition of a fund?
A fund is 'a pool of money or property that is managed or held to make distributions to other entities' (ATO). Rather than delivering direct services to the public, a fund is meant to receive contributions from the public and redistribute them to other segments of the public by providing grants, property, and other benefits to other charities. A fund must have the following characteristics: have a trust deed, operate on a not-for-profit basis, be allowed to invest money, and be administered by members of the public.
What should I include in a public giving fund’s governing rules?
The ATO states that the governing rules of a giving fund must reflect its objects of purpose. Receipts to donors must be issued in the name of the fund and efforts should be made to invite the public to contribute. Public giving funds must have a non-profit status, and the fund cannot indemnify the trustee, or an employee, officer or agent of the trustee, for a loss caused by their dishonesty, gross negligence, recklessness, deliberate act or omission. The majority of the trustees, committee members and directors of the trustee must have a degree of responsibility to the community (a 'responsible person'). The selection process should be included in the governing rules and when the entity winds up, the trustee must transfer any surplus to another eligible DGR.
What is the role of a public trustee?
A public trustee is an independent specialist skilled at estate administration. Once appointed, the trustee receives statutory powers to assist in dealing with estate decisions such as caring for a property. They must keep trust beneficiaries informed, share information about assets and liabilities, pay debts, and distribute assets or benefits. Public trustees can operate in any Australian state or territory, but they may be subject to different regional laws, governance rules, and accountability measures. A public trustee is different from the trustee of a public giving fund. The trustee of a public giving fund must be a constitutional corporation (usually a company registered with ASIC) or the Public Trustee of a state or territory.
Are there any limits to the investments, donations, and disbursements a public giving fund can make?
Yes. A public giving fund cannot borrow money, except for up to 90 days to make a required distribution, and even then its total borrowings cannot exceed 10% of the market value of its assets. Nor can it give security over an asset it holds or buy collectables; if a donor gives it a collectable, the fund must sell or distribute it within 12 months. A public giving fund must distribute a minimum level of the assets it holds each year, currently 4% of the market value of its net assets, to DGRs other than giving funds. If the fund pays expenses from its assets, it is obligated to distribute at least $8,800 or 4% of the market value of the net assets, whichever is greater. A newly established fund does not have to distribute anything in the financial year it is set up or the four years after that. On 26 February 2026 the Government announced a 6% minimum for both public and private giving funds, with distributions able to be smoothed over three years. The change is not yet law. It will apply from the first financial year after the giving fund guidelines are amended, and existing funds will then have two years to comply.
Additional Resources
To learn more about the ACNC’s recommended governance standards.
In March 2022, Australia’s Treasury consulted on possible changes to the distribution guidelines for ancillary funds.
Learn more about the Charities Act and other relevant legislation.
References
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Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Act 2026, Schedule 7. Assented to 15 September 2026; Schedule 7 commenced 1 October 2026. ↩︎
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Mcgregor-Lowndes, M., Balczun, M., & Williamson, A. (2022) Ancillary Funds 2000–2020: ACPNS Current Issues Information Sheet 2022-1. [Working Paper] ↩︎
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Australian Centre for Philanthropy and Nonprofit Studies. (2022). ↩︎
This fact sheet is intended as a simple overview. Non-profit law is incredibly complex and there are many components, allowances, restrictions, exceptions and important qualifications that are not described above. Dedicated legal advice should be sought from a legal practitioner before taking action.
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Better Boards connects the leaders of Australasian non-profit organisations to the knowledge and networks necessary to grow and develop their leadership skills and build a strong governance framework for their organisation.
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