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Philanthropy

Philanthropy is the act of donating money, goods, services, time and/or effort to support a socially beneficial cause with a defined objective. Philanthropy means different things to different people and may involve giving of your time or expertise, donating money or a combination of these things. Individuals may be casual (ad hoc) in their approach to giving, passive (regular but not involved) or strategic (regular and involved). Furthermore, many people begin as casual or passive philanthropists and move on to a more strategic approach as their interest deepens. 

In order to help you achieve your philanthropic objectives, we discuss the different ways that you can give with a particular focus on your financial contribution. Alternatives include direct donations, donating time and goods to a charity, bequests through a will and giving through corporate foundations. They each have advantages and disadvantages, varying in flexibility, efficiency, simplicity, continuity, investment expertise, tax benefit, time and talent consumption, cost and community effectiveness.

Your goals and objectives

The reasons why people give encompass a broad range of personal, family, social, religious and financial factors. In undertaking a philanthropic strategy, are you looking to:

  • Make a difference?
  • Become personally involved?
  • Continue or create a family culture or tradition?
  • Obtain a tax benefit? or
  • Give back to the community for example due to a family illness?

Your intended level and pattern of giving, financial position over time, level of active engagement and knowledge, skills and ability will also be important considerations. Identifying and evaluating these from the outset will assist you in selecting a giving structure that is aligned to your needs and wishes.

Where we can help

As financial advisers we help our clients protect or grow their wealth to achieve their goals for the reasons that are important to them. We are finding that more of our clients are seeking advice on how they can incorporate philanthropy into their overall wealth management and estate planning strategies. Advice on philanthropy forms an integral component of these strategies whereby you allocate a part of your resources to serve community and social interests beyond your family needs.

Traditionally, those with capital surplus to their personal needs have been advised to give directly to a charity or establish a private foundation or trust. Now, good advice is needed to become an engaged philanthropist. 

Tax benefits

Tax initiatives introduced in 2001 to encourage philanthropy provide a greater incentive for individuals, families and business to make a difference in the community through charitable giving. Our advisers can assist you in this process.

The incentive is attractive and tangible if donations are made during your lifetime, rather than being left as bequest in your estate.

The appropriate choice of which charitable giving option is best depends on the specific objectives of each individual, family or business.

For those wishing to make a financial contribution there are now a broader range of options to make charitable giving more tax effective. The options vary from making a simple cash donation to a specific charity on the one hand, to making a large contribution of either money or property to a public or private fund on the other. And tax deductions for significant contributions may now be spread over a period of up to five years.

Your adviser will take into account your attitude towards control of capital, family participation and choice of charity, as well as the question of who is to be responsible for the administration and cost effectiveness of the program.

Where to from here?

At times we read reports of wealthy people who have retired from a successful business life to pursue a life of philanthropic giving. Stories of the likes of Bill Gates and Warren Buffet and their charitable activities are popular topics for media reports. Nevertheless it is important to realise that philanthropic ambitions can be pursued by many people who have achieved financial security. It need not be limited to the realm of billionaires.

Philanthropy can be as much about “doing” as about the size of the donation. In fact clients with varying amounts of wealth and time make valuable contributions and achieve personal satisfaction through a range of philanthropic structures. If you are interested to explore how you can develop a sustainable program of charitable giving and become an engaged or more strategic philanthropist, rather than continuing to donate on an ad hoc basis, you should discuss your options with your Centric Wealth adviser.

To achieve the greatest impact on the community and have the ideal outcome for you, requires an in depth knowledge of your current financial affairs and personal objectives, as well as a full understanding of the philanthropic landscape. 

If you would like to discuss or find out more about charitable giving please contact one of our Advisers or email info@centricwealth.com.au



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Philanthropic Strategy
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