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Ancillary funds are special funds that provide a link between people who want to give (donors) and organisations that can receive tax deductible donations as deductible gift recipients (DGRs). Ancillary funds are set up for the purpose of providing money, property or benefits to organisations endorsed as a DGR.

There are two types of ancillary funds:

  • private ancillary funds
  • public ancillary funds.

Ancillary funds are a specific type of trust regulated by the Australian Taxation Office (ATO), and the ATO has specific requirements for private ancillary funds and public ancillary funds. Both private and public ancillary funds have a specific DGR category.

Ancillary funds and charity registration

Not all ancillary funds are charities.

If your ancillary fund is not already registered with the ACNC, it can only be registered if it meets the legal meaning of 'charity'.

There are specific eligibility criteria for registration as a charity. Charities must:

  • be not-for-profit
  • have only charitable purposes that are for the public benefit
  • comply with the ACNC Governance Standards, and the ACNC External Conduct Standards (if operating overseas)
  • not have any disqualifying purposes, and
  • not be an individual, political party or government entity.

Charitable ‘government entities’

The Charities Act extends what is a 'charity' to include ancillary funds that give to DGRs that would be charities if they were not government entities. In other words, if an ancillary fund gives to a DGR that is a government entity but that is otherwise charitable, the fund can apply to be registered as a charity.

The definition of 'government entity' is set out in the Charities Act and includes:

  • Commonwealth, state or territory departments, executive or statutory agencies, and
  • certain government enterprises and entities that are established under a law by a state or territory, and which are also prescribed by legislative instrument.

Before your fund can give to DGRs that are government entities, check that your state or territory legislation allows your fund to do this and still remain charitable. Also ensure that your fund complies with any other requirements of that legislation (for example, you may have to amend your trust deed, or make a declaration, to allow your fund to give to DGRs that would be charitable if they were not government entities).

Automatic registration

Private and public ancillary funds that were recognised (endorsed) as charities by the ATO to receive charity tax concessions before 3 December 2012 were automatically registered with the ACNC.

Until 31 December 2013, ancillary funds that gave to DGRs could be endorsed by the ATO as 'income tax exempt funds' (ITEFs), which was a separate category under tax law to receive income tax exemptions. ITEFs that were endorsed by the ATO on or before 31 December 2013 were automatically registered with the ACNC on 1 January 2014.

These funds must continue to meet the ATO conditions for being an ITEF so it can continue to be deemed a 'charity' under the Charities (Consequential Amendments and Transitional Provisions) Act 2013 (Cth). These conditions include only giving to exempt DGRs.

Obligations

All registered charities have ongoing obligations to the ACNC.

Unless we or another government agency tell you otherwise, private and public ancillary funds that have obligations to another government agency like the ATO (such as notification or reporting) must continue to meet these obligations.

Prior to the 2016 reporting period, charities that were ancillary funds were required to submit an ancillary fund return to the ATO and an Annual Information Statement to the ACNC.

Since 2016, the majority of these funds have only been required to submit the Annual Information Statement. The ATO contacts funds that still need to submit an ancillary fund return.

Withholding fund information from the Charity Register

The Charity Register includes information on all registered charities, including the:

The ACNC Regulations specifically allows private ancillary funds to ask us to withhold or remove some of this information from the Register. Generally, this is information likely to identify individual donors. Private ancillary funds that were endorsed as ITEFs and were automatically registered on 1 January 2014 can also apply to have information withheld.

If you apply to have information withheld, we will process your application and notify you of our decision. Read more about when we may withhold information.

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