The value of phi­lan­thropy

En­cour­ag­ing fig­ures re­leased by the tax of­fice show that wealthy Aus­tralians are putting their hands in the pock­ets and giv­ing back to com­mu­nity ini­tia­tives de­spite tax and reg­u­la­tory bur­dens against them and the char­i­ties that re­ceive the do­na­tions.

Business First - - CONTENTS -

The lat­est fig­ures from the Aus­tralian Tax Of­fice’s De­ductible Gift Re­cip­i­ent List­ing (17/07/2014) high­light grow­ing phil­an­thropic in­vest­ment by wealthy Aus­tralians with the largest num­ber of new pri­vate an­cil­lary funds (PAFs) be­ing es­tab­lished since be­fore the global fi­nan­cial cri­sis.

The good news is that 141 PAFs were es­tab­lished in the year end­ing 30 June 2014, bring­ing the to­tal num­ber of PAFs in Aus­tralia to 1,225.

PAFs are the fastest grow­ing seg­ment of phi­lan­thropy and also likely the largest. PAFs held $2.93 bil­lion in funds as at 30 June 2012, and dis­trib­uted $250 mil­lion to the com­mu­nity across wel­fare, ed­u­ca­tion, cul­ture, re­search and other sec­tors dur­ing 2011/12.

Chris Cuffe, Chair­man and founder of Aus­tralian Phil­an­thropic Ser­vices said the in­crease in the num­ber of funds is ev­i­dence of a grow­ing tra­di­tion of phi­lan­thropy among wealth­ier Aus­tralians.

“The con­tin­ued suc­cess of pri­vate an­cil­lary funds is cru­cial to en­gage the next gen­er­a­tion of phi­lan­thropists,” he said.

“It is great to see in­creas­ing num­bers of fam­i­lies shar­ing their wealth with the com­mu­nity and par­tic­u­larly en­cour­ag­ing to see in­creas­ing num­bers of those listed in the BRW rich list also known for their phi­lan­thropy.”

Ear­lier in the year the Aus­tralian Char­i­ties and Not-for-prof­its Com­mis­sion (ACNC) called on char­i­ties to share their ex­pe­ri­ence of red tape in the sec­tor through an on­line survey.

The survey, con­ducted by Ernst and Young, was part of a wider re­search project to mea­sure the base­line of red tape im­posed on the sec­tor and to iden­tify tar­get ar­eas for red tape re­duc­tion.

“Par­tic­i­pants at the fo­rum, in­clud­ing char­i­ties, told us the im­por­tance of mea­sur­ing the amount of red tape af­fect­ing the sec­tor and rec­om­mended that we com­mis­sion re­search into this,” said ACNC Com­mis­sioner, Susan Pas­coe AM.

The ini­tial phase of the red tape re­duc­tion re­search looks into the reg­u­la­tory and re­port­ing bur­den on char­i­ties at the Com­mon­wealth level.

Fu­ture re­search may look at the bur­den im­posed by states and ter­ri­to­ries and the bur­den on the broader Not for Profit sec­tor.

The re­search in­volves de­vel­op­ing a con­cep­tual frame­work, con­duct­ing case stud­ies and map­ping and cost­ing red tape.

While th­ese statis­tics of in­creas­ing phil­an­thropic be­hav­iour, along with re­search be­ing done into the bur­den of red tape is en­cour­ag­ing, there is still a great deal of leg­is­la­tion to bat­tle through, par­tic­u­larly for the re­ceiv­ing char­i­ties. Ease of this bur­den is re­quired to en­cour­age even fur­ther par­tic­i­pa­tion in wor­thy causes.

Aus­tralian Phil­an­thropic Ser­vices is one of the key cham­pi­ons of the PAF model in Aus­tralia and pro­vides in­de­pen­dent, not-for-profit ad­vice to in­di­vid­u­als and ad­vis­ers.

Since its launch in 2010, Aus­tralian Phil­an­thropic Ser­vices (orig­i­nally known as the So­cial Ven­tures Aus­tralia PAF ser­vice) has grown rapidly and is now es­tab­lish­ing over 25% of all new PAFs in Aus­tralia.

Aus­tralian Phil­an­thropic Ser­vices cur­rently sup­ports over 100 clients with their phi­lan­thropy, of­fer­ing busi­nesses, wealthy in­di­vid­u­als and fam­i­lies the abil­ity to do­nate tax ef­fec­tively to a trust they have cre­ated. The trust can then dis­burse funds to a range of el­i­gi­ble not-for-profit or­gan­i­sa­tions over a cho­sen time­frame.

The pos­i­tive change has come via a shift in the reg­u­la­tory en­vi­ron­ment, which up un­til a decade ago did not pro­vide tax ef­fi­cient phil­an­thropic struc­tures com­pa­ra­ble with those avail­able in the USA and UK.

While that is no ex­cuse for not putting your hand in your pocket, it did make phi­lan­thropy or phil­an­thropic ef­forts cum­ber­some.

In 2001, a Howard gov­ern­ment ini­tia­tive pro­moted fam­ily phi­lan­thropy, with the first Pri­vate An­cil­lary Funds be­ing es­tab­lished as Pre­scribed Pri­vate Funds (PPFs). The business com­mu­nity had sig­nif­i­cant in­put, un­der the guid­ance of David Gon­ski.

In 2009, after sig­nif­i­cant con­sul­ta­tion with the sec­tor, the struc­ture was re­formed by the Rudd gov­ern­ment, new Guide­lines in­tro­duced and the struc­ture re­named Pri­vate An­cil­lary Funds. Ar­eas of com­pli­ance were tight­ened and pro­cesses stream­lined, with th­ese changes re­ceiv­ing bi­par­ti­san support.

It is im­por­tant that progress con­tin­ues to be made be­cause phi­lan­thropy should be a life­style choice, with­out bur­den. The more help busi­nesses and wealthy in­di­vid­u­als can give to wor­thy causes and char­i­ties, the bet­ter off we all will be.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.