Giving to charity

If you have an interest in giving to the community, it’s sometimes hard to know where to start. While you may not consider yourself a ‘philanthropist’, these days there are a number of ways to give that can be rewarding for you and the community. As charitable giving can have a big impact on your tax position and your overall financial plan, it’s worthwhile seeking advice from us about this.

What should I consider first?

There are a number of ways to give to the community, but how you do this will depend on a number of factors.

• Your reasons for giving – Do you want to help the community in general, help a specific cause, establish an award or scholarship, claim a tax deduction or get your family involved in giving?
• The level of money you have to give – Do you have $20,000, $200,000 or $2million?
• The level of involvement you want – Do you want control over how funds are used or who will receive your donation?
• Your timeframe – Do you want to give during your lifetime, through your will or both?

Your answers to these questions will help you and your adviser decide on the best approach and whether planned giving is appropriate.

What’s planned giving?

Planned giving is planning when, how and to whom you give for maximum personal, family and community impact.

Establishing a charitable trust during your life or through your will is one way to plan your giving. It gives you control and flexibility to give in a way that suits you and importantly, the ability to generate a sustainable income to the community. It also allows you to get your family or business involved or leave a legacy in your name.

How a charitable trust works

When you set up a charitable trust, your initial and any ongoing donations into the trust are generally tax-deductible. These are invested and the income earned is distributed to charitable causes of your choice. Even if you decide not to make ongoing contributions, your capital has the chance to keep growing and produce income. This means that the trust can keep giving independently of you and long after you are gone.

If you want to provide a sustainable community gift, but don’t need a high level of involvement, setting up a sub-account within a larger charitable trust (a public foundation) is also an option.