Authored by Gina McIntosh, Private Client Adviser - Wealth
The recent announcement of Nicola Forrest’s landmark philanthropic commitment, valued at nearly $520 million, has brought the power of giving further into the spotlight. It’s a reminder that wealth can do more than generate financial returns; it can create lasting change for people and communities, supporting causes that matter for the current generation and those to come.
While gifts of this scale capture headlines, philanthropy isn’t just for billionaires. But for families building, managing or preparing to transfer wealth, it can be a meaningful and powerful way to support causes they care about, bring generations together, pass on values and education around financial literacy.
Philanthropy can play an important role in shaping a family legacy, helping future generations understand that wealth brings responsibility, not just opportunity.
Philanthropy: a practical lesson in family values
Many families already donate to charities, or support causes close to their hearts. A more structured approach to giving can take this a step further, turning generosity into an ongoing family conversation.
For example, a Private Ancillary Fund (PAF) (which are currently transitioning to be known as Private Giving Funds) allows eligible families to contribute money to a dedicated charitable structure, invest those assets and distribute grants to eligible charities over time. Family members can collaborate in decisions about which causes to support and why.
This creates opportunities for younger generations to learn about financial responsibility, governance and decision-making in a practical setting.
Rather than simply inheriting wealth, along with the responsibility and often the burden that comes with it, they can begin developing the skills to steward it thoughtfully.
Why governance matters
A PAF also introduces an important lesson: giving involves responsibility, not just generosity.
PAFs have formal governance and compliance obligations, including requirements around their trustees, investment management and distributions to eligible charities. Trustees carry legal responsibilities to ensure the fund is managed appropriately and for its charitable purpose.
For families, this creates an opportunity to teach younger generations how good governance works in practice. Clear decision-making processes, defined responsibilities and transparent discussions about funding help build accountability and prepare the next generation to take on greater responsibility over time.
A PAF can act as a real time learning environment for philanthropy education. Rather than just talking about privilege, the family as a whole, can use the framework of the PAF to engage the younger generation on the realities' of the world outside of their immediate circle.
A Private Ancillary Fund (PAF) can provide an opportunity for younger family members to develop an appreciation for philanthropy, community impact and responsible stewardship.
It’s also worth planning for the future. How will family giving priorities be maintained as generations change? Who will participate in decisions? And how can the family’s original intentions be balanced with the causes future generations care about?
These conversations can help turn philanthropy into a lasting part of a family’s core values and succession plan.
How philanthropy can prepare the next generation
1. Turn family values into action
Start by discussing what matters to your family. Is it education, medical research, environmental conservation or addressing disadvantage? Agreeing on shared priorities helps younger family members understand the values behind your wealth and how those values can translate into meaningful action.
2. Teach the value of due diligence
Choosing a cause is only the beginning. Encourage familymembers to research organisations, understand the challenges they address andconsider how funding could make a difference. It’s an opportunity to explorequestions about impact, transparency and responsible use of money.
3. Introduce governance and accountability
A philanthropic fund involves real responsibilities.Depending on its structure, these may include formal decision-making, record-keeping, regulatory compliance and oversight of how funds are distributed.
Families can establish clear roles and processes, givingyounger generations opportunities to contribute while learning how decisionsare made and responsibilities are shared.
4. Let the next generation have a voice
Consider asking family members to put forward a cause for support. They could prepare a short proposal explaining the issue, theorganisation they recommend, the funding required and the outcomes they hope toachieve.
This mirrors the grant-making process used by manyphilanthropic organisations and encourages research, critical thinking,collaboration and accountability.
It also creates space for different generationsto bring their own perspectives to the family’s giving philosophy.
Wealth may be inherited, but the values, perspective and responsibility to manage it are often learned.
Planning a legacy that lasts
Philanthropy can be a powerful part of succession planning, but it works best when families have open conversations about their wealth, their intentions and who will make decisions in the future.
That means thinking beyond the initial donation. Who will guide the fund? How will decisions be made if family priorities change? How can the founder’s intentions be respected while allowing future generations to contribute meaningfully?
These questions are worth considering early, with appropriate professional advice to help establish the right structure and governance arrangements.
Ultimately, philanthropy offers families an opportunity to connect wealth with purpose. The amount given matters, but so does the thought, responsibility and care behind it.
The information contained in this article is general advice only and does not take into account your objectives, financial situation or needs. Before acting on any information in this article, you should consider whether it is appropriate for you, having regard to your objectives, financial situation and needs. You should consider the relevant product disclosure statement or other applicable disclosure document before making any investment decision. If you require advice that takes into account your personal circumstances, you should speak with a qualified financial adviser.
