INTHEBLACK July 2025 - Magazine - Page 22
F E AT U R E
The philanthropic system is vast, and
unintended consequences from every change
ripple through the system. The job of the
PC is to try to anticipate as many of these
consequences as possible.
Another recommendation was to raise
the annual minimum distribution rates
of public and private ancillary funds
to between 5 per cent and 8 per cent of net
assets, from the current 4 per cent and
5 per cent respectively.
Ancillary funds are special-purpose
donation vehicles that allow an immediate
tax deduction, even if distributions to
charities are spread over a number of years.
CPA Australia and Chartered
Accountants ANZ’s joint submission to
the draft version of the PC report cautioned
that “mandatory minimum drawdowns
have the potential to threaten the liquidity
of funds which are set up for longer terms,
particularly ones intended to run
in perpetuity”.
LISTEN
A CHARITY SPEAKS OUT
Angela Taylor FCPA, CFO of
Victoria-based DGR charity Asylum
Seeker Resource Centre, supports a higher
contribution rate from ancillary funds.
“One of the findings of the report,
lifting the annual percentage of giving
for those ancillary funds, resonates with
me,” says Taylor. “That sounds like a very
logical conclusion, because it would give
more immediate access to funding
for not-for-profits.”
Taylor values the contribution that
ancillary funds make. In her experience,
they bring greater reliability to funding
than relying predominantly on public
fundraising each year.
“What motivates our donors is that
asylum seekers and people seeking refuge
have human rights — and those human
rights need to be upheld.”
to a podcast
episode about
doubling giving
by 2030
THE ROLE OF ACCOUNTANTS
Accountants have an important role
as the donations mount. While they have
LISTEN
to this story
READ
an article
on structured
philanthropic
giving
22 INTHEBLACK July 2025
always advised donors on structuring their
donations, Subramanian thinks that, in the
case of large donations, accountants could
also work with the accountant from
the recipient charity.
“They can ensure there are procedures
and policies in place for the donation
to be applied to its intended purpose.
“Sometimes there’s a lag between the
receipt of the funds and use of the funds.
The accountant can advise on prudent
investment and management of money until
it’s needed,” he says.
“In the case of a donation made for
capital purposes — for example, the
construction of a building — the accountant
can assist in project managing the funds
over the period of capital expenditure.”
ALL GIVING MATTERS
Before the era of tax deductions, giving
to charity was primarily an act of conscience,
an expectation of acquiring merit or an
expression of kindness.
Low- and middle-income Australians
may well meet this definition more than
the tax-deductibility data shows.
Philanthropy Australia’s Greater Giving
report estimates that about a quarter
of donations to charity are not claimed
against tax.
What’s more, Australia was placed
number eight on the World Giving Index
2024, beaten by (from number one)
Indonesia, Kenya, Singapore, The Gambia,
Nigeria, the US and Ukraine. Around
59 per cent of the Australian sample said
they donated to charity, and 34 per cent
said they had volunteered. The Australian
system provides no tax incentives for
volunteering, and the PC report made
no explicit recommendations.
One of the downsides to the dominance
of the donor class is that its emergence
could lessen the motivation of others
to give. The PC report highlights the
difficult government policy choices that
will help ensure the system builds a
stronger community. ■
