What is an ancillary fund?
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 DGRs.
There are two types of ancillary funds that fall within a DGR category:
- private ancillary funds, and
- public ancillary funds.
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'. The ATO has other specific requirements for ancillary funds, for example that they can only give to DGRs.
Read more about the ATO's requirements for ancillary funds.
Registration with the ACNC
Automatic registration for endorsed funds
Private and public ancillary funds that were recognised (endorsed) as charities by the Australian Taxation Office (ATO) to receive charity tax concessions before 3 December 2012 were automatically registered with the ACNC. Information on all registered charities is published on the ACNC Charity Register.
Automatic registration for income tax exempt funds (ITEFs)
Until 31 December 2013, ancillary funds that gave to DGRs could be endorsed by the ATO as 'income tax exempt funds' (ITEFs), 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.
All ITEFs which were automatically registered with the ACNC on 1 January 2014 need to submit an Annual information Statement from the 2014 reporting period and onwards.
New registration applications
Meeting the definition of charity
You can now register your ancillary fund if it is a 'charity' under the Charities Act 2013 (Cth) (the Charities Act), which generally requires it to be not-for-profit, with a charitable purpose that is for the public benefit.
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 your fund gives to a DGR that is a government entity but that is otherwise charitable, your 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.
Attention - Important information!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 make sure 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).
Find out more about:
- the prescribed entity types in the Charities (Definition of Government Entity) Instrument 2013 and explanatory statement
- private ancillary funds (ATO guidance), and
- public ancillary funds (ATO guidance).
Ongoing obligations for all registered ancillary funds
Private and public ancillary funds registered with the ACNC have ongoing obligations under the ACNC Act. These include to:
- notify us of certain changes
- keep records
- report to us each year (by submitting an Annual Information Statement and financial reports where required), and
- comply with governance standards.
Obligations to other regulators
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. We will be working with other government agencies to reduce the regulatory burden over time, such as through alignment of reporting requirements.
Find out more about charity obligations to other regulators.
Withholding fund information from the Charity Register
The Charity Register includes core information on all registered charities, including name, contact details, governing documents, names and positions of people on their governing bodies, and financial reports (for medium and large charities). The Australian Charities and Not-for-profits Commission Regulation 2013 (Cth) 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.