Smart ways to give

Choosing to give money to charity or charitable causes that you care passionately about can be straightforward but there are several different ways you can give. Some considerations include:

• When do you want to give? When you are alive, after you have died, or both?
• How much do you want to give? Depending on your circumstances, philanthropy can look very different. Ultra wealthy donations & how they are managed can differ greatly and have a whole range of complexities.
• How much control do you want over how the funds are managed and granted?
• Are tax benefits something you need to consider?
• Do you want to leave a lasting legacy, which involves your spouse, children and grandchildren?

Your answers to these questions will help you decide which of the different structures offers you the smartest way to give. Four of the most common options available are:

The options range from simple and quick, such as a one-off direct donation to complex and long-lasting, such as setting up a private ancillary fund which is often the choice when it come to ultra high net worth wealth management. Let’s take a more detailed look at the options.

One-off donations Making a direct donation to a charity is still the most common way to give. Donations can be as small as $2 and are fully tax-deductible.

Bequests A bequest is a donation to benefit a charity or cause of your choice which is specified in your Will and commences upon your death. It may be a specific donation or you might choose to establish a charitable trust, which is a long-term giving structure often in perpetuity. A charitable trust is effective if you want to maximise the impact of your initial gift over the long term All earnings on the funds held in trust are tax-free This option is most suitable if you have over $250,000 to give.

Private ancillary funds A private ancillary fund (PAF) is a charitable trust, set up during your lifetime or upon your death to benefit nominated causes. A PAF enables you to ensure your giving will align with your values and interests and that it will continue after you die. Any donations you make to a PAF are tax-deductible and all income and capital gains generated within the PAF are tax-exempt. This option is suitable if you have over $500,000 to give.

Public ancillary funds As an alternative to a private ancillary fund, you can establish an account under a public ancillary fund. This allows you to focus on the pleasure of giving, without having to worry about the ongoing administration, investment management or compliance involved in a private ancillary fund. An account can be established with an amount of $50,000.

 

Remember - if you need help to decide on your smartest way to give, we’re here to help at Endura Private Wealth.