Canberra calls for feedback on proposed changes to charitable giving funds

Posted on 11 Jun 2025

By Greg Thom, journalist, Institute of Community Directors Australia

The federal government has opened consultation on proposed reforms to public and private ancillary funds aimed at ensuring more money from charitable trusts reaches charities sooner.

Charities Minister Andrew Leigh said public and private ancillary funds will be renamed “giving funds”, to better reflect their role in supporting charitable giving.

Ancillary funds are typically philanthropic trusts that function as vehicles to distribute tax deductible donations to charities over time.

The government has asked for feedback on two proposed changes to the rule regulating funds:

Increasing the minimum annual distribution rate, so more money reaches charities sooner
Allowing distributions to be averaged over three years, helping funds plan their giving more effectively.

Both proposed changes are in line with recommendations contained in two major reports into the charity and not-for-profit sector: the Productivity Commission’s Future Foundations for Giving and the Blueprint Expert Reference Group's Not-for-profit Sector Development Blueprint.

However, Philanthropy Australia has publicly said it supports retaining the existing minimum distribution arrangements for ancillary funds.

In its list of policy priorities released before the federal election, Philanthropy Australia said the funds encouraged more and better giving for the benefit of the many charities working in the community.

However, it said that the minimum distribution mandates that a certain proportion of a fund’s value is distributed as grants each year, which is a key lever that the government uses to regulate ancillary funds.

“Philanthropy Australia supports having a minimum distribution and takes a measured stance in response to any proposed changes to its rate.”

In 2016, Philanthropy Australia opposed a federal government proposal that would have reduced the minimum distribution rate and decreased the required flow of funds to charities.

“We would adopt the same considered approach in response to any new proposal to change the minimum distribution, seeking an outcome that supports the role of these funds as an important source of giving for the benefit of the community.

“We think that the current arrangements work well in that regard, and therefore we don’t see the need to increase or decrease the minimum distribution, especially given the risk of unintended consequences.”

“While careful investment can help grow these funds over time, the government wants to ensure that donations made with tax concessions are reaching charities at the right pace.”

Charities Minister Andrew Leigh.

The government has invited sector feedback on the proposed changes via a consultation paper published on the Treasury website. The deadline is August 1.

Leigh said that giving funds play an important role in connecting generous Australians with the causes they care about.

“While careful investment can help grow these funds over time, the government wants to ensure that donations made with tax concessions are reaching charities at the right pace,” he said.

The government announcement follows the recent launch of the national Redefining Giving philanthropy campaign.

Spearheaded by the Equity Trustees Charitable Foundation, the campaign aims to open the public’s eyes to the capacity for structured giving to turn generosity into something powerful and permanent.

Unlike one-off donations or regular giving, structured giving involves using financial vehicles such as Public Ancillary Funds and charitable trusts to grow assets and make distributions to eligible charities in a planned, strategic and long-term way.

Benefits include tax breaks, sustainable impact, and the ability to align giving with personal values and long-term goals.

The national manager of active philanthropy at Equity Trustees, Denise Cheng, said structured giving is a strategic way to give that goes beyond one-off donations.

“It’s about the creation of a tax-effective giving structure, which leverages the power of investments to create greater impact over a longer period.

“It’s a way people can start now – and see their contribution to making a difference over time.”

Sector leaders have for years called for a coordinated national campaign aimed at increasing charitable giving.

The Productivity Commission’s Future Foundations for Giving report found that a government-funded public awareness campaign could help broaden participation in giving, but there was insufficient evidence to conclude that it would be effective.