Posted by

For many families we work with, giving is part of their DNA. It might be giving financially, by donating to charities they support, or giving time, and giving back to the community. It might be sitting on boards of charitable organisations.

For some families, their potential to become significantly charitable increases as the security of their core wealth objectives grow, and they come to better understand the meaning, utility, and value that one derives through giving.

But what happens once you reach retirement, and you no longer have the regular income you’re used to?

Charitable families and business owners want to make sure that their hard-earned money is invested soundly and in a way that manages risk and minimises the taxes and fees that can erode their capacity to give.

After all, the more funds they’re able to retain, the bigger the impact they can have on causes that mean something to them.

With appropriate planning and a carefully considered investment methodology in place, giving doesn’t have to stop at retirement.

How to give sustainably

There are a few ways in which people choose to give.

For some, it’s about giving their time. They sit on boards of charitable organisations, and spend their time actively participating in institutions that run social welfare programs.

Financially, giving can be through donations, whether it’s money, cash, securities, or even property.

This type of giving can be done throughout a person’s life. It can even continue once you’re no longer around, in the form of a will and leaving money to charities.

When aiming to maximise your charitable giving, specialist advice can help you determine the investment structure that best suits your goal and provide you with advice that ensures your charitable giving activities remain intact—and even becomes tax-effective.

It all depends on what your goal is.

Your financial adviser will work with you to determine:

– How much you plan in giving, and how often

– Where your money will be donated

– Your preferred donation timeframes

– How tax-effective your donations will be

Using these factors, your advisor can decide whether it’s better for you to make direct regular charitable donations, or if it’s more worth your while setting up an ancillary fund.

Utilising ancillary funds

Setting up an ancillary fund is the next step in charitable giving.

An ancillary fund is a type of trust that enables you to collect donations and distribute them for charitable purposes. It ensures that your money is delivered to the charities of your choosing, while also enabling you to set up a method of charitable giving that will live on, even after you’re no longer around.

It enables you to leave a charitable legacy.

There are two types of ancillary funds available.

Public ancillary fund

This is an ancillary fund that’s able to receive donations from the public. These donations are then used to make regular contributions to deductible gift recipients (DGR). A public ancillary fund is required to distribute at minimum 4% of the market value of its assets each year.

Private ancillary fund

A private ancillary fund is one that’s not able to receive any public donations. This structure is commonly used by family groups and is known colloquially as a ‘family foundation’. A private ancillary fund is required to distribute at minimum 5% of the market value of its assets each year.

But setting up an ancillary fund isn’t as simple as opening a bank account. This type of giving requires a robust investment approach, appointment of a corporate trustee, and regular financial reporting.

As such, one should only consider the setting up of a private ancillary fund if the family is willing to donate their time and seek professional advice.

Leaving a legacy of charitable giving

At Stephan Independent Advisory it gives us an immense amount of pride that we’re able to assist others in their charitable inclinations. We’re passionate about working with families and family business owners who see the real value in giving and enable you to choose the method of giving that best suits your needs.

We can create a framework that ensures you’re able to continue your charitable giving practices long into retirement. We’re able to help you establish an ancillary fund, working with you to create your mission statement, develop your investment policy, and provide advice on its governance and administration practices.

Our goal is to enable you to continue to give the way you want to, regardless of your working situation. We can even work with you to include your children in the charitable giving process. This provides them with the basic introduction to important money management principles, and more importantly, engages them in the spirit of philanthropy.

When your whole family is involved, you can ensure the spirit of giving lives on in the next generation.

Joe Stephan

Director, Stephan Independent Advisory

Joe Stephan graduated in 2002 with a Bachelor of Business (Fin Plan) under the tutelage of his father (Program Leader of Financial Planning at RMIT University).

You will hear Joe bandy about the idea of “pure financial advice”, which is given objectively and focused around the needs of individual and not the internal needs of the business providing advice.

Joe is realising his vision every day through his Independent Advice Firm which he owns and operates with his brother James. Joe also spends a portion of his time teaching tomorrow’s Financial Planners at various Melbourne Universities including RMIT & LA Trobe.

  • Enjoy the fruits of working life Joe & James were able to provide me with the impetus to take the next step into retirement which could have been delayed without quality financial advice. Dr. Kevin Adams Self Funded Retiree
  • Professional practice to be admired Joe & James' professional practice is to be admired. They are always there for his clients when needed. They freely pass on their expert knowledge without hard product selling techniques. Dr. Elspeth Mckay Associate Professor
  • Personal advice for complex lives Stephan Independent Advisory took the time to understand our situation & tailor their advice & solutions to our specific needs which, being a business owner, can be quite complex. Paul Marsh - Principal P2 Group - Business Owner
  • Family centered advice We have moved our investments from being a private client with a major bank to Stephan Independent Advisory in 2018. Since this move, we have been surprised at the depth of understanding encountered from Joe and James about our future plans and their ability to comprehend exactly what we wish to achieve. Mr Graham and Mrs Judith McKnight Self Funded Retirees
  • Values aligning with our own Clear, timely and direct responses in all areas of communications are outstanding. Meetings are planned and run efficiently to deliver on all our expectations. The firm’s values align to our own so that trust is readily established. Mr John and Dr Kim Watty Self Funded Retirees

It’s Never About Money

Whether you have significant financial resources and question the meaning of success or if you’re wondering whether being that little bit wealthier will make you happier this is the podcast for you.


Stephan Independent Advisory
Private Wealth Management
Suite 506, 1 Princess Street, Kew VIC 3101