That’s according to Australian Unity Trustees executive general manager Emma Sakellaris, who noted that charitable giving in Australia has increased $1 billion to $121 billion in the last two years. At the same time, the visibility of giving is also increasing.
Speaking in the run-up to the end of the financial year and tax time, Ms Sakellaris said there were many ways for middle-income Aussies to make a difference.
“Middle Australia are appreciating that they are comfortably well off and wish to give back during their lifetime. Whilst most still provide for their children in their will, many do not intend to leave everything they own to the family, who are often comfortably well off in their own right,” she said.
“Rather, structured charitable giving either during their life or as bequest in their will, becomes a priority.”
Ms Sakellaris explained that a sub-fund in a charitable trust can be established through an initial donation of $20,000.
This is a significant sum, but the tax deduction can be spread over five years with all subsequent donations tax deductible.
“Unlike ad hoc donations or even recurring donations, charitable trusts are designed to grow capital over time, whilst generating sustainable income for granting,” she continued.
“The donor, family and friends can all donate to the trust, and claim the tax deduction. This will further grow the capital and therefore increase the income generated to distribute to eligible charities.”
The benefit of a structured legacy is that it facilitates donations now and into the future.
“It allows them to develop long-term charitable approaches that make a real difference to the community,” Ms Sakellaris said.
“All charities depend on donations and are very appreciative of them. However it is regular, recurring giving that provides the most benefit.”
Donating at tax time
Ms Sakellaris said potential donors should avoid leaving the decision too late into the financial year.
“For one-off donations, it is important to ensure the charity receives the donation by June 30 – not just that you have made the donation by that time,” she said.
“For many, however, the one-off June 30 donation gives rise to philanthropic interest that becomes more structured and focused over time,” Ms Sakellaris added, pointing to charitable trusts.
At the same time, social media is assisting crowdfunding philanthropy and allowing donors of all means to pitch in.
“While more traditional grant-making via structured giving contributes critical funding to charitable initiatives and remains a key component of tax planning, at the same time significant global events, such as unprecedented natural disasters or mass people displacement, have shaped community movements toward fund raising,” Ms Sakellaris said.
She gave the examples of ‘local hero’ style fundraising, selfies, statuses and videos as ways of boosting awareness and prompting, or accelerating, giving.
“This type of philanthropy is often locally based and contributes to the further development of community care and support. In many ways it is a social leveller,” she said.
“When people contribute to a shared cause through a medium such as GoFundMe, contributor details, such as level of wealth, are not apparent. Instead, the medium simply connects an often large, potentially global, community who feel compassion and motivation to contribute varying amounts to a particular cause.”