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Giving isn’t just an act of kindness; it can also be a smart financial move. From helping loved ones today to creating a legacy for future generations, strategic gifting can align with your broader financial goals.
After all, Australians are generous. We consistently rank among the most charitable in the world with a study showing that, in the past year, more than 50 per cent of Australians have donated money and over 30 per cent have donated their time.i
Australia, as a wealthy but ageing nation, is well-placed to grow charitable bequests, but the reality is less encouraging. The number of people leaving bequests to charities is low and the size of the bequests also “falls far short of international peers”, according to The Bequest Report by JBWere.ii
Often, giving is reactive rather than planned. We might respond to a donation drive, an emotional TV ad, a friend’s fundraiser or gift property or shares to a family member.
But giving can also be intentional. Some people choose to set aside a portion of their annual income, commit to monthly donations or include charities in their wills. Others join workplace giving programs or support causes that reflect their values. In this way, generosity becomes less about impulse and more of a conscious decision.
There may be advantages in taking a more strategic approach. It can amplify your impact, build your reputation, open doors to new networks and potentially deliver tax benefits. Donations to organisations with deductible gift recipient (DGR) status can help to manage your tax position by reducing taxable income. If you give more than $2 to an organisation with DGR status (and you have a taxable income), you can claim a 100 per cent tax deduction for your donation.iii
Planned giving can help to create a lasting impact, building a legacy for family and community. It integrates generosity into financial planning, ensuring investments reflect personal or family values. In this way, it becomes a tool for involving younger generations in financial governance, teaching responsibility and shared purpose.
Strategic giving can also take the form of early inheritance, funding education, or contributing to a family trust - all of which can help manage future tax obligations and support long-term family goals.
For those looking to make a lasting impact on their communities, structured giving vehicles offer flexibility and control.
It can create long-term financial stability to favourite causes, providing predictable funding for charities. It can potentially reduce complexity in estate planning and ensure your wishes are carried out; and donating assets may offset capital gains tax liabilities.
Unlike mass market or other forms of giving, such as direct donations to charities, crowd funding and volunteering, structured giving involves using a vehicle designed to enable giving such as:
• Private Ancillary Funds - often used by families and individuals able to make a minimum initial contribution of $500,000 with a plan to grow the fund beyond $1 million.
• Public Ancillary Funds - suitable for those with a lower entry point of $20,000
• Community foundations or giving circles - enable donors to pool resources for local impact. Entry levels can be as low as $2,000.
• Donor Advised Funds or sub funds - a simpler, more flexible structure allowing donors to distribute funds over time. They can be established relatively quickly with some recommending an initial donation of a minimum $20,000.
Structured giving can also occur without using a dedicated vehicle through, for example, corporate cash donations or larger scale and planned contributions from individuals and families.
Giving isn’t just about generosity, it’s about creating a lasting impact.
If you’re passionate about a cause or want to explore the role of giving in your financial plan, we’d love to help you integrate it in a meaningful, tax-effective way.
iii Inquiry Report - Future Foundations for giving | Productivity Commission
Please note, the above information does not constitute financial advice and does not take into account your current circumstances or goals. Please speak with a Financial Adviser before acting on any information found here or throughout the 5 Financial website.