Structured giving blends tax efficiency with lasting legacy

The latest ATO data shows 5 per cent growth in the number of PAFs year-on-year, bringing the total number of PAFs in FY2023 to 2,196. Since then, this figure has grown to roughly 2,400 PAFs with 136 newly approved in FY2025 alone. APS typically establishes about a third of new PAFs each year.

However, what the ATO data doesn’t report on is the growing number of sub-funds in Public Ancillary Funds (PuAFs). Unlike PAFs, which are usually set up and controlled by an individual, family, or company to manage their structured giving and which often have an independent investment manager to manage the funds, PuAFs are charitable trusts that receive tax-deductible donations from many people who have individual accounts (sub-funds) within the trust. The funds are invested as a pool, the returns are shared across the accounts, and the account holders recommend gifts to their chosen eligible charities.

Due to the pooled nature of PuAFs, the entry point to establish a sub-fund is lower than that for PAFs, making structured giving a viable option for a much larger range of donors.

The APS Foundation – Australia’s fastest growing and most generous PuAF amongst its peers – saw the creation of 123 new Giving Funds (or sub-funds) in FY2025, demonstrating that PuAFs are a key growth area in structured giving.

This data shows strong momentum, but given the efficiency, control and tax benefits on offer, we feel further growth can be fuelled by better utilising giving structures. 

For those advising their clients, the implications are significant. 

The mechanics behind a PAF are powerful and should be front of mind in any philanthropic or succession planning conversation. A donation to a PAF is fully tax-deductible in the year of contribution, or the deduction can be spread over up to five years. The PAF itself is typically income-tax exempt and can claim franking credits, allowing your client to commit to their philanthropic intent today, while retaining the flexibility to invest the capital and distribute it over time, aligning with their strategy and capacity.

This is particularly valuable for clients facing a liquidity event, such as a business or property sale. A PAF allows them to crystallise the deduction now, invest the funds, and support charities later when appropriate.

But the story is much richer than tax efficiency. 

New data from the 2025 APS Client Survey, one of the most comprehensive studies of structured giving in Australia, reveals that clients are driven by a deeper purpose. The survey found that 86 per cent of donors were motivated primarily by a desire to give. Structuring your giving via a PAF or a Giving Fund in a PuAF represents a move towards long-term, values-led philanthropy.

The survey also showed that for many APS clients, it’s about building a legacy, with more than six in 10 saying they intend to maintain their fund in perpetuity, ensuring their charitable impact continues for generations. Furthermore, over 70 per cent of APS clients have already identified successors or family members to continue their giving.

For families seeking connection and a shared purpose, a PAF or a Giving Fund in a PuAF becomes a powerful tool for intergenerational engagement. At APS, we see that donors who establish giving structures early in their wealth journey give more consistently and often at higher levels over time. Through this survey, our clients have demonstrated to us that the structure transforms philanthropy from a series of one-off donations into a sustained, family-driven mission.

To support the desire for legacy, a common concern for clients is ensuring the capital they dedicate to charity achieves competitive returns, and the performance of the APS Foundation provides a clear answer. 

For the year to 30 June 2025, the APS Foundation’s General Portfolio returned 10.6 per cent after fees. Since its inception in 2012, the portfolio has achieved 10.2 per cent with a distribution rate well above the mandated 4 per cent minimum. This model successfully preserves long-term capital while generating substantial, ongoing funds for charity. 

The downstream impact is profound. Applying institutional-quality investment management within a charitable (tax-free) structure amplifies the benefit of each philanthropic dollar for the wider community and further allows the funds available for charitable impact to compound over time.

Of course, accountants and financial advisers play a key role in the success of structured giving.

Guidance from trusted advisers on structured giving vehicles is critical. All too often, donors tell us that “discovering” structured giving in a year when they happened to have a tax event was entirely serendipitous. If they had heard about it a year later, the opportunity to create a giving structure may have passed them by. Professional advisers can therefore play an important role in helping clients plan for these events and incorporate philanthropy into their broader wealth conversations. It’s a win for clients and a win for advisers in helping to deepen client relationships and connect with the next generation.

A significant portion of the total donation pool is concentrated in large, one-off gifts, and while these types of donations to charity are a valuable addition, a formal philanthropic vehicle creates more control over investment, governance, and distribution, while still capturing tax benefits. It can also help families forge deeper connections with the next generation of givers, as well as their advisers throughout the journey.

When discussing structured giving with clients, accountants should focus on these key points:

• Highlight the immediate tax deduction.
• Show how the capital can be invested and grow tax-free (or near tax-free) for charitable purposes.
• Emphasise legacy, family engagement benefits and joy – including the capacity to involve children and pass on more than money to future generations.

PAFs and PuAFs are rising rapidly for good reason – they allow donors to give more effectively, invest with intent, and build philanthropic capital that can respond to changing circumstances and emerging needs. But the jump from "making donations" to "structured philanthropy" is the difference between a one-off act of generosity and enduring impact.

Accountants are uniquely positioned to integrate this discussion early, and those who guide clients into that space add meaningful value, both financially and philanthropically.

This is especially true for clients with the capacity and intent to do more, because when tax-deductible giving is organised through an intelligent, enduring structure, donor intent meets donor impact, and a legacy is born.