In 2017, Mark Barry approach the Giving Connect team to establish a private ancillary fund (PAF) on behalf of his aging client with charitable objective – to maximise care and help provide a cure for bowel cancer and dementia.

Context

Mark had already identified a PAF as the ideal vehicle to support his client in achieving her legacy objectives, but there was a catch – his client wanted to maximise the impact of her giving in the short term and not exercise the perpetuity horizon permissible under Australian trust law.

The Giving Connect team initially worked with Mark to identify a suitable trustee to establish the PAF and ensure the vehicle was set up to receive its initial gift. This was later significantly grown by a gift from his client’s estate when she passed 2 years later.

By then Mark had decided to retire from providing financial advice; he and the trustee appointed his colleague Daniel White at Shadforh to manage the foundation’s investments. Mark agreed to join the Foundation’s recently established advisory committee in capacity as Chair.

Solution

The first task was establishing a granting strategy, with a dual focus on care and a cure for Dementia and Alzheimer’s Research, to help the foundation ‘spend down’ its corpus by 2037. Mark engaged Giving Connect to assist with this process.

Maureen wanted to make an impact in the short term – identifying the best way to achieve this presented a fascinating challenge and opportunity as her trusted adviser.

We needed to address the mechanics of the foundation (eg. trustee, cashflow modelling), but just as importantly, also had to consider the Foundation’s granting strategy. Giving Connect provided us with the best framework to achieve this.

Mark Barry, Chair, Terry and Maureen Hopkins Foundation advisory committee

Spend down foundations are a unique type of charitable foundation that operate with the specific goal of disbursing all of their funds within a specified period of time, typically a few years to a few decades.

In Australia, charitable trusts are not subject to the law of perpetuity, so can continue over the longer term. This is the traditional model for most structured giving, but a shift towards “spending down” has been gaining popularity in recent years aligned with more and more philanthropists seeking to have a greater impact in their lifetime.

For more information on establishing a Private Ancillary Fund, developing a granting strategy or evaluation framework to enable your foundation into ‘spend down’ its corpus, contact us.