How to access Private Ancillary Funds (PAFs)?

One of the most common questions we are asked by not-for-profit organisations at Strategic Grants is “Does your grants database have a list of Private Ancillary Funds?” (commonly referred to as PAFs) along with the next obvious question of “Great – how can we receive funds from them?”.

A lot has happened in the world of PAFs since our original blog post in 2021. Let our research team unpack it all for you below.

First things first: What exactly is a PAF?

A Private Ancillary Fund (PAF) is a unique charitable fund created and controlled by individuals, families, or organisations. The ‘private’ aspect means that it’s not open to the public, but it allows the donor to be active with decisions around investments and distributions to non-profits— if that is what they choose—or the decision making may be given to a nominated corporate trustee.

The Australian Taxation Office (ATO) states that to establish a private ancillary fund (AF) with deductible gift recipient status, you need to:

Create a trust that is a private ancillary fund (private AF)
Obtain an Australian business number (ABN)
Get endorsement as a deductible gift recipient (DGR)

Public Ancillary Funds (PuAFs) differ from PAFs in that they can accept money from the public to disperse to non-profits (we’ll unpack PuAfs in a future blog post!).

PAFs are regularly on the Strategic Grants radar—they are one of the many sources of funding that we research and are an increasing area of focus when there may not be many open grant rounds.

What does the PAF data show us?

The Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) recently released a report showing that in the 2021 financial year, the 1939 PAFs publicly listed held a total corpus of $11.6B (1) and donated/granted/distributed $511M. Since 1 July 2021, there have been over 270 PAFs created.

The corpus of a PAF (the total assets) is by no means the only indicator of amounts available for distribution when we look at the current PAF “market”. Some of the largest PAFs have assets over $500M while others donate the full amount every year, leaving a corpus of $0.

The PAF data trends show that there is consistency with new PAFs being created each year (96 in 2020; 131 in 2021; 156 in 2022; 110 in 2023) which indicates the availability of more funds and new sources of philanthropic funding.

In our original 2021 blog, we reference a research paper published by our friends at Fundraising Research & Consulting (FR&C), which takes a rigorous look at exactly what information is and is not available in the public domain. While the number of PAFs in the public domain have increased since then, the information on what information is and isn’t available in the public domain rings true – you can read the full report here.

So why are PAFs important for you and your organisation? (Besides the obvious amount of funds available!)?

There is a public enquiry and review of philanthropy within Australia now which is being conducted by the Productivity Commission to double philanthropic giving by 2030. There is also research into how, over the next 20 years, there will be significant transference of intergenerational wealth from the baby boomers to Generation X (4,5,6) which will no doubt contribute to the increase of PAFs and funds available for charitable purposes.

If you’re wondering how your non-profit organisation can find and access these PAF funds that are steadily growing within the Australian landscape, read more about our grants database GEMS here.

It’s all about the relationship

Our view, which is in line with that of our friends at FR&C, is that cold approaches to any major donor, including PAFs, is unlikely to be effective.

The principles of best practice fundraising dictate that building relationships with your donors who have some affinity with your mission, and engaging them in a meaningful partnership, is a much stronger strategy. Quite simply, look for those donors who want to achieve the same objectives with their philanthropy, that you are delivering through your work (and for more on grant-seeking best practices, download a FREE copy of the Strategic Grants Best Practice Tracker here).

It is also about matching your project and organisation’s purpose to those of the PAF and what the directors of the PAF have funded before. You wouldn’t be approaching an arts focused PAF based in Melbourne if you want funding for an animal welfare project on the Sunshine Coast in QLD.