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Private Ancillary Funds After 12 Years

 John McLeod, researcher at the JBWere Philanthropic Services team, shares his insight into the findings from the inaugural JBWere PAF Report, 'Private Ancillary Funds After 12 Years'.

 

Giving in Australia has seen significant change over the past decade. While much of the recent news has been around the strong growth in major gifts with over 20 in excess of $1m, a slightly longer term focus highlights the large influence Private Ancillary Funds (PAFs) have had on giving.

Since the first PAF was established in June 2001, they have grown in number to an expected 1,200 by June 2014 and have distributed about $1.5 Billion to deductible gift recipients. Welfare continues to be the most popular cause supported with almost 30% of total distributions to date. However this share has declined in recent years along with education, while support for environment and international affairs has grown.

In addition, by June 2014, we expect that the combined PAF corpus will have grown to around $3 billion, with cumulative donations into PAFs totalling about $4 billion. Not surprisingly, economic conditions show a strong correlation with donations into PAFs. Annual donations reached almost $800 million by 2008, falling to around $300 million in each of the following 3 years during the global financial crisis. Recent improvements in financial markets should see renewed growth in donations when data is next released.

The advantage of this dedicated and growing pool of philanthropic funds making annual grants has meant that recipient organisations didn’t see this volatility in annual distributions from PAFs. Also, while there is a required 5% minimum distribution level from PAFs, the average over the last 3 years (since new regulations have been in place) has been around 8%.

The latest JBWere research on PAFs can be found here.