Planning to Give?

giving back
“As you get older you will discover you have two hands, one for helping yourself, and one for helping others.”                                                                                              Audrey Hepburn

In our quest to live meaningful and purposeful lives, the act of giving to others creates a sense of fulfilment and satisfaction that cannot be experienced in many other ways.

Over the years, I have observed that most of the successful people I have worked with have regarded giving as core to their sense of community and contribution.

It is common when we are discussing values with a client at Capital Partners that they will make “contribution to the community” or “giving back” central to their family’s values, and that this then forms part of their wealth planning. Giving appears in many forms other than donating money, and volunteering alone is estimated to contribute more than $25 billion each year to the Australian economy1.

We should never overlook the benefits of volunteering particularly for those who have retired from the workforce. I often refer to the PERMA formula for happiness, and the feelings of engagement, meaning and accomplishment that are key sources of satisfaction for those who volunteer their skills and time for the causes they want to support.

Industrialist Andrew Carnegie was one of the wealthiest people who ever lived and he once wrote,“I will spend the first half of my life earning a fortune, and the second half of my life giving it away.” Few of us will ever have the wealth to contribute the vast sums that the likes of Bill and Melinda Gates or Australia’s Dick Smith or David Thomas have contributed over the years, however for those who have enjoyed considerable financial success, philanthropy is a growing priority.

The different motivations for giving are many and varied. To begin with there are considerable tax advantages available for donors as the federal government provides tax relief to encourage us to donate. The establishment of a charitable foundation is often timed to coincide with the sale of a major asset or family business. Proceeds from the asset sale that might otherwise be assessable income and therefore taxable, are strategically donated to a foundation to provide a long term legacy to fund the family’s charitable interests. When established correctly, the contributions to the foundation are fully deductible.

Another benefit of giving is the opportunity to share the experience with family members. Family stewards will often describe the  value of creating a conversation around the family dinner table and discussing how the whole family would like to contribute to charity. Some families formalise the process by engaging younger generations in the investment strategy for the foundation and the selection of charitable recipients.

A personal connection to a charitable cause is another major reason for involvement. Where a family member has benefited from the services of a charity, family and friends are often deeply motivated to contribute, raise funds and donate skills and time to help others.

While there are many ways to contribute to society, sharing your wealth in a planned and considered way can be enormously rewarding and facilitate grassroots change that governments are unable to deliver.

So how should you go about establishing a formal giving plan? My recently published book Wealth With Purpose discusses planned giving in greater detail.

If you would like to talk with an adviser about this or any other aspect of your financial life, Capital Partners Private Wealth Advisers may be able to assist you.

If you enjoyed this article you may also be interested in:
PERMA Formula for Retirement Happiness
What’s Your Plan?
Seven Steps for Setting Great Goals

1 Volunteering Australia, Australian Bureau of Statistics