In fact, anyone can set up their own perpetual charitable fund with as little as $50,000 and enjoy the satisfaction that comes from making a real difference.
We recently sat down with Amanda Sartor, Manager of Elston Philanthropic Services, to see how she is helping people connect with causes that are close their heart. It's clear that it's a job that she loves. "For me, it's wonderful seeing someone find a way to not only give, but also get so much in return," said Amanda.
Here's a short excerpt from our interview with Amanda.
Absolutely. If you're giving your time, skills or money to support causes in your community, then philanthropy is already a natural part of your life. You might be sitting on the board of a Not-For-Profit or volunteering at the local surf club. That's philanthropy too.
Yes, making a charitable bequest or setting up a charitable trust through your Will is also Philanthropic and something that is important to consider. But it's not the only way to give in a way that will have a lasting impact. We often discuss with clients the options to give while they are alive and can enjoy the process as opposed to gifting via their Will. Importantly, we discuss with clients the potential risk that a charitable donation through a Will may not happen, if the estate is litigated.
Well, in 2001, the Australian government established a Private Ancillary Fund (PAF). A PAF is a type of 'giving structure' that allows taxpayers to do three things. They can donate (pre-tax) money. They can invest the money for perpetuity. And they can typically grant the income over time to the charities they are passionate about.
Absolutely. A giving structure can last a lifetime, or two or three. And that effectively creates a multi-generational legacy of giving.
They are pretty popular. There are currently about 1,800 Private Ancillary Funds operating in Australia and almost 2,000 charitable sub-funds. And the number of these giving structures is expanding rapidly.
That is a big attraction, yes. You can claim your tax deduction before you donate. This is good for people who have sold a property or a business and are going to incur a large tax event in a particular year. They may be ready to donate a large amount of money, but they may not be ready to choose the exact charity to give to. A giving structure allows them to make the donation and claim the deduction now and then have more time over the coming years to choose which charities or projects they want to support.
Definitely. You have the ability to invest your donations and any future donations in a tax-free environment and grow the funds over time. This allows you to give money for longer. It could also magnify your donations as your capital grows, so you can give more money than your original donation. With the right planning, you can create a perpetual legacy.
Yes they do. A foundation is a formal way of saying to your family "we value giving back and making a difference in the lives of others". It can inspire younger generations to build respect (and have fun) in using the family wealth to give back to causes they are interested in. Importantly, it also gives them the opportunity to practice their investment and governance skills by sitting on the board of the family foundation.
Yes, they do and they're not Rockefellers. They're just people like you and me who want to give and make a real difference.
Read more about how Collins Hume as a business incorporates charitable giving into our everyday activities at Our Giving Impact.
If you've enjoyed this article and you'd like to know more about philanthropy, it's important to talk with your advisers about giving as it relates to your own personal or business needs. For more information please call us on 02 6686 3000 so we can put you in touch with our specialist business partners at Elston.
Let Collins Hume partner with you to achieve greater business and lifestyle success as your trusted advisers. Call us in Ballina or Byron Bay on 02 6686 3000.