Fund Establishment Policy

1. Introduction

Australian Communities Foundation is a non-profit organisation that supports and enables smart, rewarding and effective giving. One of the ways we do this is by supporting donors to establish and build Named Funds to structure their giving.

2. Purpose

In approving new Named Funds, the Trustee (ACF Board) requires potential donors to understand:

• the legal status of the Named Fund they are establishing
• that the purpose of the Named Fund is within ACF’s vision, mission and value parameters
• that the donations being placed in the Named Fund do not contravene ACF’s ethical investment guidelines (Investment Policy available upon request)
• that the source of donations will not damage ACF’s reputation.

3. Definitions

• Named Fund (often referred to as a sub-fund, donor-advised fund or Future Fund) – A management account created for Fund Advisors who can make recommendations on granting and other administrative aspects of the Fund. The ACF Trustee or its delegates make final decisions. Requires a balance of $10,000 to be established and must always maintain a balance of at least $10,000.
• Fundraising Named Fund – Must, through fundraising efforts, build a Fund balance to $10,000 within a year of establishment. Once it reaches $10,000 balance, the Fund becomes a standard Named Fund.
• Gumnut Account – A Fund type that can build up to $10,000 over a period of years. Requires a minimum donation into the account of $2,000 a year. A Gumnut Account cannot grant or process expenses. Once it reaches a $10,000 balance, the Fund converts to a standard Named Fund.
• Pass-Through / Collective Giving Funds – A Fund may be able to forgo the $10,000 minimum balance requirement if an agreement is made with ACF management. This will involve a non-standard fee structure. Individual rules and guidelines will be laid out in a Memorandum of Understanding. 
• Fund Advisors – The individuals responsible for establishing a Named Fund at ACF. They may be individuals, members of an organisation, company, etc. Fund Advisors advise ACF on grants and other aspects of Fund administration. Fund Advisors may also be appointed by existing Fund Advisors following the establishment of the Fund.
• Establishment – The process of setting up a Named Fund at ACF. Involves a prospective Fund Advisor to provide required information to ACF, for ACF to approve the Fund’s establishment, the establishment of the Named Fund within ACF’s systems, and the initial donation from the Fund Advisors. Investment Options – As per the Investment Policy, Fund Advisors can advise which investment option the fund will utilise at the time of establishment. Refer to the Investment Policy for further details on investment options.

4. Named Fund Establishment Procedure

• Prospective Fund Advisors must provide ACF with information to establish a Named Fund. Fund Advisors are provided with a Fund Establishment Form which requests all the information required. Fund Advisors must be honest and accurate when completing the form.
• ACF will review the Fund Establishment Form and conduct the internal processes to create the Named Fund within ACF’s systems.
• ACF maintains the right not to establish a Fund if the Fund Advisors, the Fund’s stated mission and/or values do not match with ACF’s vision, mission and values.
• Fund Advisors must be made aware that the Named Fund is not a separate legal entity but is a management account within the overall Trust Fund, and the rights and obligations of this impose on the Advisor and ACF Board.
• Donations made into a Fund cannot be sourced in a way that contravenes the Foundation’s values and ethical investment guidelines.
• An ACF staff member must have a conversation with a prospective Fund Advisor prior to the establishment of a Fund.
• A Fund cannot have the words ‘Foundation’ or ‘Trust’ in its name.
• Once the Named Fund has been approved by ACF and established, ACF will inform the Fund Advisors that it is complete, and their initial donation can be made.

5. Named Fund Operations Procedure

• A minimum donation of $10,000 is required to establish a Named Fund with ACF.
• The initial donation must be received within three months of the Fund’s establishment.
• If a Fund has not received its minimum donation of $10,000 within one year of the Fund being established, the Fund will be closed. Any money within the Fund will be transferred to the ACF Impact Fund or donated to eligible charities, as per discussions with the Fund Advisor.
• A Named Fund balance must always stay above $10,000. Grant requests lowering a Fund balance below $10,000 will not be approved, unless under extreme circumstances. If a Fund balance drops below $10,000 due to fees or negative investment returns, the Fund will be unable to grant or process expenses until the balance is above $10,000.

6. Gumnut Accounts Operations Procedure

• If a Named Fund is identified as a Gumnut Account, it must receive at least $2,000 in donations per annum. If Fund Advisors are unable to continue contributing to the Gumnut Account, ACF may agree to a period of abeyance for no longer than a year.
• If a Gumnut Account does not receive its $2,000 annual donations, it may be subject to a Fund Closure. Any money within the Fund will be transferred to the ACF Impact Fund or donated to eligible charities, as per discussions with the Fund Advisor.
• When a Gumnut Account reaches $10,000 in balance, it converts to a Named Fund. It will be charged standard Named Fund fees and can make grants and request expenses. A Gumnut Account cannot request expenses or reimbursement from the Fund.

7. Fundraising Fund Operations Procedure

• If a Named Fund is identified as a Fundraising Named Fund, Fund Advisors can take 12 months to establish the minimum $10,000.
• If a balance of $10,000 is not received within a year, ACF will contact the Fund Advisors to determine the status of fundraising efforts.
• ACF may suggest or require a Fundraising Named Fund to close if Fund Advisors are unable to grow the Fund balance to $10,000. See Fund Closure Policy (available upon request).
• A Fundraising Fund may request expenses and reimbursements directly related to an approved fundraising event if the Fund has a balance.

8. Pass-Through / Collective Giving Funds Operations Procedure

• Pass-Through and Collective Giving Funds may have different requirements and operate under different circumstances. A Memorandum of Understanding will be provided on a case-by-case basis which will outline these rules.

9. Conditions

• ACF reserves the right to reject any Fund establishment request.
• Fund Advisors must abide by the rules within this policy and other ACF policies. Failure to abide by policies or if Fund Advisors act in a way that is counter to ACF’s vision, mission or values may lead to a closure of the Named Fund or a request to port the Fund to another Public Ancillary Fund.

Last updated: January 2025