Clitheroe Foundation

Paul and Vicki Clitheroe had supported a number of charities over the years on an ad-hoc basis and wondered if their money was being used effectively. The introduction of prescribed private funds (PPFs) as a new flexible trust structure in 2001 was timely and in 2004 the Clitheroes established their foundation which focuses on supporting health, medical research and the arts.

The Foundation has since established scholarships and fellowships with a number of organisations such as Juvenile Diabetes, the National Art School, Sculpture by the Sea, the Sydney Symphony and the NSW Art Gallery.  

Artsupport Australia met with Paul and Vicki in 2005 and introduced the role it could play researching and sourcing arts projects that met the Foundation’s interests and criteria. Artsupport Australia was then able to draw on the expertise and resources within the Austraila Council for the Arts to establish a short list of potential funded projects. Artsupport Australia also mentored the shortlisted organisations through the application process and presented their proposals to the Foundation for their consideration.

Through Artsupport Australia’s facilitation, the Clitheroe Foundation has supported an annual scholarship for a Graduate student with the National Art School over a three-year period (beginning in 2005), and a three-year mentoring program for three emerging sculptors each year selected for Sculpture by the Sea which commenced in 2006.

The PPF structure allows Paul and Vicki  to make contributions in pre-tax dollars, allowing them to build a solid capital base. Their PPF then plans to give away its income and returns in excess of inflation. The Foundation will then grow with new contributions from the family and a sensible investment philosophy. The Foundation aims to give away between $250,000 to $300,000 a year, though the amount may increase over the years.

Setting up the Foundation using the structure of a PPF was a “breeze”, they say. “It was an advantage to know John Emerson at Freehills and he basically did everything. We just sent a few e-mails and we signed the trust document.”

They estimate the total set-up cost was about $3,000. While it is cheap to set up, the total amount of money in the fund needs to be a reasonable figure, otherwise operating costs will eat into capital. It is a similar analogy to operating a self-managed superannuation fund.

Under PPF rules, the trust needs an independent person as a trustee. The Clitheroes say “This was easy. One of our long-standing friends from University College is a medical specialist and he is a valuable asset, as we do have a focus on medical research."

The Clitheroes feel that a family foundation is an ideal vehicle to involve children in giving from an early age. Their children will become trustees when they turn 18, and in time the Foundation will be controlled by them.

The Clitheroe family also wants the Foundation to become a role model for others and are keen ambassadors in the community to change attitudes about giving.

The interest in PPFs is growing and the Clitheroe’s are finding that people want to talk more about effective ways of donating. “Effective giving is becoming a regular topic of conversation today, and that has to be good for everybody,”

Source: “Better to give than to receive”, Financial Planning magazine, September 2004.
Reproduced with permission from the Financial Planning Association of Australia.