A shift in tax‑effective philanthropy advisers shouldn’t miss this EOFY
Andrew Binns
End of financial year has traditionally been framed as a moment to minimise tax. Increasingly, however, it is becoming something more meaningful – a moment when clients are open to aligning their wealth with their values.
For advisers, this shift presents both an opportunity and a challenge. Clients are asking more sophisticated questions about giving. Not just how much, but how to give well. They want structure, flexibility, and impact – but without unnecessary complexity or administrative burden.
What has been missing is the right infrastructure to support this shift at scale.
The Federal Government’s recent introduction of the Community Charity[1] is creating a new pathway for tax-effective giving. It is a platform that enables a different way of thinking about philanthropy – one that is more flexible, more connected, and better aligned with how advisers already work with clients on wealth.
Bridging the gap in structured giving
Historically, advisers and clients haven’t lacked options, but they have faced trade-offs. Direct giving is simple, but often reactive and fragmented. Private Giving Funds (formerly ancillary funds or PAFs) offer structure and control, but come with complexity, cost, and governance obligations that don’t suit every client.
Donor-advised funds within public foundations sit between these options, providing a more accessible, professionally managed pathway for structured philanthropy.
Community Charities build on this pathway, providing greater flexibility and new ways for capital to flow – without requiring clients to establish standalone entities or take on compliance and trustee responsibilities.
What Community Charities enables in practice
The real power of Community Charities lie in how they can support clients to engage in philanthropy in more intentional ways.
1. The ‘give now, decide later’ client
Through a Community Charity account such as a Named Fund Plus at Australian Communities Foundation, clients can make a tax-deductible contribution now, secure the deduction immediately (or spread out over up to five years), and take time to plan their giving strategy. This is particularly relevant for business owners after a liquidity event, clients with volatile income, or families wanting to involve the next generation in decision-making.
Rather than rushing donations in June, advisers can offer a structured alternative: commit now, plan well, and give over time.
2. Clients who don’t want a private foundation – but want more than ad hoc giving
Many clients sit in the ‘missing middle’ – they want structure but not the responsibility of running a PAF. Using the donor-advised fund model, the Community Charity enables:
- Ongoing, invested philanthropic capital
- Professional administration and compliance
- Strategic granting support
For these clients, a fund within a Community Charity becomes a philanthropic portfolio, sitting alongside their investment portfolio.
3. More ambitious, flexible giving – beyond traditional charity categories
One of the most significant shifts is the ability to direct tax-deductible support beyond traditional charities. In Australia, donors have long been constrained by the ATO’s Deductible Gift Recipient (DGR) system, often leaving them unable to effectively support organisations they care about.
Through a Community Charity, clients can support early-stage organisations, social enterprises, and community initiatives undertaking DGR1-aligned activities, even where those entities do not hold DGR1 endorsement themselves. This matters because many of the most innovative responses to social issues sit outside traditional categories.
For example:
- A client wanting to back a grassroots climate initiative that hasn’t yet obtained DGR1 status
- A family supporting an individual researcher or community leader
- A group of donors pooling funds for a place-based initiative
Advisers should seek confirmation from their chosen Community Charity provider as to exactly which use cases qualify and what due diligence the provider performs.
4. Supporting for-purpose organisations to build long-term sustainability
Community Charities also enable a new endowment model for for-purpose organisations. Through a Community Charity account like an ACF Future Fund Plus, organisations can:
- Build their own endowment
- Receive tax-deductible donations for DGR1 activities (even if they are not endorsed as a DGR1 organisation)
- Generate long-term income through responsible investment
This is particularly powerful for mid-sized charities without the scale to establish a foundation, social enterprises seeking more stable funding, and community organisations wanting to move beyond annual fundraising cycles.
For advisers, this opens up another option in conversations with clients – the opportunity to seed endowment funds for their favourite organisations.
5. A more connected philanthropic ecosystem
Another significant shift is how capital can move within the system. Funds within a Community Charity can accept contributions from individuals, corporates, and structured vehicles like Private and Public Giving Funds (formerly ancillary funds, or PAFs and PuAFs).
This creates new pathways for clients with PAFs to access the expanded granting flexibility of a Community Charity, where supported by providers. For example, a client can make grant distributions from their PAF into their Community Charity account and then recommend grants to non-DGR recipients. Compared with PAFs, a Community Charity has a lower minimum annual distribution requirement (4%), which, depending on the provider, may not be applied at the individual account level, providing even greater granting flexibility.
The broader implication is a shift away from siloed giving, creating opportunities for co-funding between clients, blended giving strategies (private funds contributing into public structures), and more coordinated responses to major issues. In effect, Community Charities enable a more fluid, collaborative model of philanthropy, where capital can be deployed more strategically.
Why this matters for advisers now
EOFY remains an important entry point. It is when clients are focused on tax outcomes and open to making decisions. The ability to offer a structure where clients can act now but plan later is compelling. But the real significance extends well beyond EOFY.
Community Charities allow advisers to:
- Integrate philanthropy into holistic wealth planning
- Facilitate intergenerational engagement, using giving as a shared family activity
- Position themselves as advisers who understand purpose as well as performance
It also removes a long-standing barrier: advisers do not need to be experts in philanthropy to offer meaningful solutions. They can bring clients into a structure that provides the governance, expertise, and infrastructure required.
From transaction to strategy
Ultimately, what Community Charities represent is a shift from transactional giving to strategic philanthropy. Clients can:
- Build a pool of capital over time
- Invest it responsibly
- Deploy it thoughtfully, in line with evolving priorities
They can respond to immediate needs, while also maintaining a long-term view. They can involve their families, test ideas, and refine their approach.
For advisers, this aligns closely with how they already think about wealth – across time horizons, structures, and outcomes.
A new role for advice
Clients are increasingly asking not just how to grow their wealth, but how to use it. Community Charities make it easier to answer that question – practically, efficiently, and at scale.
The opportunity for advisers is clear: move beyond seeing philanthropy as an EOFY tactic and instead position it as a core part of sophisticated, forward-looking advice. Because the most valuable conversations are no longer just about returns. They are about impact, legacy, and the role wealth can play in shaping a better future.
By Andrew Binns, CEO
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