Recent Developments

Government Response to Senate Economics References Committee Report

The Government's response to the Senate Report, Investing for good: the development of a capital market for the not-for-profit sector in Australia was tabled in the Senate out of session on 19 July 2012. The report relates to the 2011 inquiry into mechanisms and options for the development of a capital market for social economy organisations and the development of social impact investment markets more generally.

Download a copy of the report 504KB PDF | 119KB DOC

Productivity Commission report into the Contribution of the Not-For-Profit Sector

On 11 February 2010 the Productivity Commission released the Contribution of the Not-For-Profit Sector research report.  The report includes a number of recommendations relating to social investment in Australia.

Report on Corporate Philanthropy and the Not-for-Profit Sector 

Mr Michael Danby MP was appointed Special Adviser to the Treasurer and Deputy Prime Minister on corporate philanthropy and the not-for-profit sector in late 2010. Mr Danby is to lead development of a report looking at ways to promote a greater contribution by business to the not-for-profit sector, which is due to be delivered to the Government in mid 2011.

Treasury Review of Ancillary Funds

Public and private ancillary funds are legal structures which are often used to establish philanthropic foundations.

Private ancillary funds are generally established by families, individuals or companies who wish to donate to their own charitable trust. Public ancillary funds are funds which engage in public fundraising or to which the public can donate, such as community foundations. In both types of fund, a core asset base is invested, and a financial return on those investments is accrued. A proportion of the assets or return is then distributed for charitable purpose usually through grants.

In 2009, the Government introduced new regulatory arrangements for private ancillary funds following a public consultation process. Changes were made requiring that a private ancillary fund distribute 5 per cent of its total assets to charitable purpose each year. These changes are designed to encourage giving by high net worth individuals to increase the flow of philanthropic funds to DGRs. For more information, see the Private Ancillary Fund Guidelines 2009.

In 2010 Treasury conducted a similar review and consultation process regarding the regulatory arrangements around public ancillary funds. The new rules will apply from 1 July 2011. For more information, see Treasury's discussion paper, Improving the integrity of public ancillary funds.

While the majority of philanthropic activity from public and private ancillary funds occurs in the form of grants, funds are also able to provide low interest or patient loans to charitable organisations, or other creative forms of financial support for a social end. Subject to fiduciary duties restrictions on trustees, funds may also choose to invest their corpus or core asset base in investments which offer a social as well as financial return.

The Government is interested in the potential for these funds to engage with the developing social impact investment market in Australia.

Philanthropy Australia report Strategies for Increasing High Net Worth and Ultra High Net Worth Giving

Philanthropy Australia was commissioned by the Commonwealth Government to conduct a series of roundtables to discuss issues and strategies to promote greater giving in Australia. The scope of the work was confined to increasing giving among high and ultra high net worth individuals. The resulting report, Strategies for Increasing High Net Worth and Ultra Net Worth Giving, was published on 17 February 2011.

The report has ten recommendations and, if implemented, could have cost implications for the Government, including the introduction of a new Deductible Gift Recipient status, providing seed/ program funding for a peak body, and providing matching grant funding to encourage philanthropic engagement in specific areas.