The proposed regulatory framework would take effect from 1 July 2011 and will include legislative guidelines similar to those introduced for private ancillary funds from 1 October 2009.
The Government will consult on the public ancillary fund changes through the release of a policy discussion paper. Details of the new regulatory framework will be finalised following consultation.
The Assistant Treasurer Senator Nick Sherry said that the new regulatory framework will improve the integrity of public ancillary funds and further boost confidence in the philanthropic sector.
Many community and fundraising foundations are set up as public ancillary funds and hold deductible gift recipient (DGR) status, meaning all donations made to the funds are tax deductible.
These funds then distribute the money gathered from public donations to other charitable organisations that also have DGR status.
In the case of private ancillary funds, businesses, families and individuals establish a charitable trust of their own with DGR status.
The Assistant Treasurer said that the Government is committed to the philanthropic sector but stressed the importance of proper accountability, particularly when it comes to organisations benefitting from taxpayer funded incentives.
“The legislative guidelines will allow for regular valuation of assets, will clarify investment and distribution rules and will contain a system of administrative penalties,” the Assistant Treasurer said.
“The new framework for public ancillary funds will provide trustees with greater certainty as to their obligations and provide donors and the charitable sector with greater confidence that donations are being used effectively.”
Third Sector acknowledges the traditional custodians of the lands where we live, learn and work. We pay our respects to Elders past, present and emerging.