Simple Certainty | The PAF: An Effective & Rewarding Philanthropic Endeavour

‘Life is a gift, and it offers us the privilege, opportunity, and responsibility to give something back by becoming more. It is not what we get, but who we become and what we contribute that gives meaning to our lives’. – Tony Robbins

The accumulation of wealth allows us to do extraordinary things within our lifetime. When we reach a certain point in life, one of those things is giving back to society. Philanthropy is one of the most worthwhile endeavours we can undertake, but we want to make sure it’s done in a meaningful way.

Many of our clients who’ve reached their golden years, ticked off their goals and amassed some wealth tend to focus on furthering their legacy through various philanthropic endeavours. There are many ways in which we can help them do this, but the first step is always a chat.

Our primary aim is to understand what your philanthropic goals and what you want your legacy to look like. Then we map out a path to see those outcomes achieved.

Achieving Philanthropic Goals with a Private Ancillary Fund

An effective philanthropic strategy we commonly employ involves setting up a PAF, or private ancillary fund. Through this fund, our clients have the opportunity to strategically create an enduring legacy that supports and promotes charitable causes dear to them. In some cases, PAFs are established in memory of a loved one.

Here’s why PAFs are an effective tool for philanthropic endeavours.

The Benefits of a PAF

1. See the rewards. The great thing about establishing something in your lifetime is that you get to see the results. Nothing is quite as rewarding as seeing firsthand your philanthropic endeavours having the impact you hoped they would. If you choose, you can also be directly involved with the causes you support.
   
2. Involve the family. To create a truly lasting legacy through your philanthropic endeavours, you need to get future generations involved. PAFs are a brilliant way of engaging family members and increasing your children’s and grandchildren’s social awareness, inspiring future generations.
   
3. Tax effective. PAFs make your philanthropic dollar go further. For example, donations are tax deductible, funds in the PAF are tax exempt and franking credits are refunded. Essentially, you can take advantage of tax benefits while having a positive impact on the lives of others.
   
4. Control. It’s understandable that we want a say in how our dollars are spent. The good news is that you can act as a Director of the trustee company that controls the PAF, directing all investments and grant-making decisions.
   
5. Flexibility. PAF’s break the line between the timing of a tax deduction and the timing of your grant making decisions. You can take the tax deduction now and decide where to distribute the money in coming years.
   
6. Sustainable. Establishing a trust in perpetuity allows you to provide charitable causes with long term sustainable funding even when financial situations change.
   
7. Community impact. Having a PAF allows you to be more considered in your grant making. You can plan for multi-year grants and redirect support as community needs change.

Talk to your Financial Adviser about PAFs

As you can see, there are many aspects to PAFs that make them an extremely effective tool for philanthropic endeavours. Not only do they give you the opportunity to make an impact while you can see it, they also have the ability to inspire the generations to come while providing flexible philanthropic avenues. Get in touch with your financial adviser to have a chat about your ambitions in this space and whether a PAF is appropriate for you.

Disclaimer

Please note this is general information only and you should always seek your own personal
advice.