Many Asian families in Australia have a long habit of giving. A grandfather may have funded a village school in Fujian, or a mother may support a temple in Penang. As the family’s wealth settles in Australia, the question becomes how to keep giving in a way that is organised, lasting and shared with the next generation.
Australia has several structures for this, each with different rules on control, tax and where the money can go. This article sets out the issues families tend to raise.
Why families give, and why structure matters
Families give out of faith, gratitude to the place they came from, a wish to honour a parent, or a hope that the children will grow up with a sense of responsibility. These motives shape the structure. A family wanting control may look at a private fund; a family wanting simplicity may use an existing public fund; a family whose causes are overseas faces separate questions. Getting the structure wrong can mean the gift is not tax-deductible, cannot go where the family intended, or creates compliance work the family did not expect.
The role of DGR status
In Australia, a donation is generally tax-deductible only if it is made to a deductible gift recipient (DGR) endorsed by the ATO. Many charities are not DGRs. Charity registration with the Australian Charities and Not-for-profits Commission (ACNC) and DGR endorsement are separate matters, and a family should check both for any organisation it plans to support.
A note on names: from 1 October 2026, private ancillary funds are called private giving funds and public ancillary funds are called public giving funds. The older names are still widely used, and we use them in this article so that readers can recognise them.
Private ancillary funds
A private ancillary fund (PAF) is a trust set up to make grants to other DGRs. It does not run charitable programs itself. The ATO explains that a PAF must be set up under a trust deed or a Will, and its trustee must generally be a company. The fund must follow the Private Ancillary Fund Guidelines 2019, which cover matters such as an annual minimum distribution, investment, and governance.
One requirement often surprises families. At least one person involved in the fund’s decisions must be a “responsible person” from outside the family. That person cannot be the founder, a substantial donor, or an associate of either. Families need to think about who that person will be and how they will work with the family board.
A PAF gives a family control and a lasting vehicle, but brings ongoing obligations such as annual returns, audit and distribution rules.
Public ancillary funds and sub-funds
A public ancillary fund (PuAF) is also a fund that makes grants to DGRs, but it must regularly invite the public to contribute, and most of its decision-makers must be responsible persons. It operates under the Public Ancillary Fund Guidelines 2022.
Families wanting an easier option often open a named sub-fund within an existing PuAF run by a trustee company or community foundation. The family contributes to the sub-fund and recommends grants each year, while the PuAF’s trustee keeps the legal decision-making power. Some providers let founders name successors. The trade-off is less control and the provider’s policies and fees.
Charitable trusts and gifts in Wills
A family may also set up a charitable trust whose purposes are charitable in law. Whether such a trust can receive deductible gifts depends on whether it is endorsed as a DGR, which many are not.
Giving can also be built into an estate plan. A Will can leave a gift to a named charity, direct a share of the estate to a sub-fund, or set up a testamentary charitable trust or a PAF to be established after death. Each approach raises drafting points: naming the right entity, what happens if it no longer exists, and how a charitable gift fits with family members’ expectations and possible family provision claims. Our separate article on leaving money to charity in a Will covers some of these points, including gifts to overseas organisations.
Giving to temples, schools and clan associations overseas
Many families’ most important causes are in Asia. In general, an overseas temple, school or clan association is not an Australian DGR, so a direct donation is usually not deductible in Australia. A PAF or PuAF can generally only grant to DGRs, so it usually cannot fund an overseas organisation directly.
Some Australian-registered charities do work overseas, and some DGR categories, such as certain developing country relief funds, are designed for that purpose. Registered charities that send money or work with partners outside Australia must also meet the ACNC’s External Conduct Standards. Whether a particular overseas cause can be supported through an Australian structure depends on the cause, the country and the intermediary charity. It needs careful advice before any money moves.
The law of the other country matters too, as rules on foreign donations differ across Asia.
Governance and bringing in the next generation
A family foundation can be a valuable training ground for the next generation. Sitting on its board teaches children to read accounts, assess proposals and make decisions as a group.
That works when the rules are clear from the start. Who sits on the board, and how are new members added? How are grant decisions made if family members disagree? What happens when a child moves overseas, or when siblings have different causes? Some families keep the trustee company’s constitution simple and set out the family’s giving philosophy in a non-binding charter. Others make parts of the charter binding through the constitution or board policies. Deciding which parts must be binding is a key design question.
Working with the charities you support
Larger gifts often come with a written gift agreement covering the purpose of the gift, naming or recognition, reporting, and what happens if the purpose can no longer be carried out. Multi-year pledges also need to fit with the family’s cash flow and estate plan.
Questions to discuss with your adviser
- What do we want our giving to achieve, and over what period?
- Do we want a family-controlled fund, or a sub-fund with less administration?
- Are our intended recipients DGRs? Are any of them overseas?
- Who would act as the independent responsible person, and who would sit on the board?
- How will the next generation be involved?
- Should giving be part of our Wills, and how will it affect family members?
Frequently asked questions
What is a private ancillary fund in Australia?
A private ancillary fund is a trust, usually with a company as trustee, that is endorsed as a DGR and makes grants to other eligible DGRs. It must follow the Private Ancillary Fund Guidelines, which the ATO administers, and include at least one independent responsible person.
Can a family foundation donate to a temple overseas?
Usually not directly, because ancillary funds generally grant only to Australian DGRs. Some overseas causes can be supported through an Australian-registered charity working overseas, depending on the facts.
Is a PAF or a sub-fund better for my family?
It depends on how much control the family wants, how much administration it can handle, and its long-term plans. Both options need advice on your circumstances.
Every family’s situation is different, and the answer often turns on details. Book a consultation so we can review your documents and circumstances before you act.
How Chua Tan Associates can help
Chua Tan Associates helps families plan their giving as part of their wider estate and succession plans. We work through the choice between a private fund, a sub-fund, a charitable trust or gifts in Wills, prepare and review trust deeds, constitutions and Will clauses, and help families design board and decision-making rules that involve the next generation. Justin Chua trained in accounting (Bachelor of Commerce, accounting major), is an affiliate member of STEP (the Society of Trust and Estate Practitioners), and advises on the legal and tax structure of family wealth together. He is a Nationally Accredited Mediator and an Accredited Family Business Advisor. We work with the family’s accountant and registered tax agents, and with lawyers in Asia where overseas causes are involved. We advise in English, Mandarin and Cantonese.
Important: This article is general information only and must not be relied on. It is not legal, tax or financial advice, does not take your circumstances into account, and may not reflect changes in the law after publication. Laws of other countries may also apply. Do not act or refrain from acting on the basis of this article. Reading it or contacting us does not create a lawyer–client relationship. Please book a consultation for advice on your situation.
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Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.
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