Ancillary Fund Guidelines have changed

We draw your attention to the Government’s recent amendments to the Private Ancillary Fund Guidelines 2009 and the Public Ancillary Fund Guidelines 2011 which set minimum standards for ancillary fund governance and conduct.

What is an ancillary fund?

In short, an ancillary fund is a special fund which links charitable donors with organisations that can receive tax deductible donations (Deductible Gift Recipients or DGRs). The fund is set up to provide money, property or benefits to DGRs.

	"...an ancillary fund is a special fund which links charitable donors with organisations that can receive tax deductible donations ..."
© Heike Falkenberg - stock.adobe.com

What has changed?

The changes include:

• Less duplication of material: amendments ensure that material provided to the Australian Charities and Not-for-Profits Commission is not also requested separately by the Australian Taxation Office ;
• Review vs Audit: smaller private funds may now seek a review instead of an audit;
• Conflicts of Interest and strategy: updates to the investment strategy rules ensure funds must consider both their status as a registered charity and conflicts of interest in preparing and maintaining a strategy;
• Loan guarantees: ancillary funds are now permitted to provide loan guarantees over borrowings of DGRs;
• Social Impact Investments: amendments provide further guidance on calculating the distribution in relation to social impact investments;
• Annual minimum distribution rate: the Commissioner of Taxation now has the power to lower the annual minimum distribution rate of a fund (in appropriate circumstances);
• Portability: amendments introduce portability into the Private Ancillary Fund Guidelines 2009.

Follow this link to view the amended Private Ancillary Fund Guidelines and Public Ancillary Fund Guidelines.