Jul 27, 2026 Matthew Hung

Public Ancillary Funds: New Giving Rules Announced

There are changes on the horizon affecting public ancillary funds, which the government has announced are set to boost charitable giving across Australia.  While these reforms are not yet law, there is a clear shift in how philanthropic funds operate and money is distributed to charities.

A key proposal is an increase in the minimum annual distribution rate for Public Ancillary Funds from 4% to 6%, bringing it into line with Private Funds.  To ease the transition, the higher rate will only apply from the first financial year after the amended guidelines take effect.  Existing funds will be granted a two-year transition period before the new minimum distribution requirement applies.

In addition, funds will be permitted to ‘smooth’ their distributions over a three-year period.  This means the 6% minimum will not need to be met each year, provided the average distribution over three years meets the requirement.  This approach recognises year to year variations due to larger one-off grants, and investment market volatility.

The reform also proposes renaming Public and Private ancillary funds as “Public Giving Funds” and “Private Giving Funds”.  While existing funds are not required to restructure or re-establish, the new terminology is intended to better reflect the core purpose of these funds – actively distributing money to eligible charities rather than accumulating capital indefinitely.

At this stage, no immediate action is required.  However, trustees and boards are encouraged to review their current distribution and investment strategies to ensure those under the 6% model are updated.  Early preparation will help ensure a smooth transition.

If you require assistance reviewing your fund’s strategy, please contact one of our friendly team here at RDL.