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Being connected to everything that is happening in the world is one of the marvels of the digital age. Face-to-face conversations with loved ones overseas, live streaming of a music festival in the Californian desert, and up-to-the-minute statistics of a Champions League game in Spain are just some of the now-everyday occurrences that could only be imagined just two decades ago.

In this 24/7 environment also comes endless news and commentary from all corners of the globe. This has a knock-on effect on financial markets, resulting in volatility. If investors in Australia wake to a foreign dignitary’s Tweet storm or news of a sinking eastern European banking system, they can safely bet on there being some sort of a reaction when the ASX opens.

At the same time, as history has taught us, these periods of volatility quell over time and normal transmission (in a growth sense) will ultimately resume.

When we talk to prospective clients who are considering establishing an Equity Trustees sub-fund, one of the graphs we show them is a model of how their initial deposit (and potential subsequent contributions) is expected to grow in capital and income over a selected time horizon.

As the Equity Trustees Charitable Foundation has now been in place for over two decades, it is interesting to look back at one of the Foundation’s early contributors to see how they have performed over the journey to date.

One client established a sub-fund back in 1998, with an initial contribution of $1 million and no further donations made since. The total fund growth and sustainable granting has been represented on the graph below.

As you can see, despite being in the market during the Global Financial Crisis of 2008, that initial contribution now sits in excess of $2.2 million capital value. During this 20-year period, the income from prudent investment by Equity Trustees has allowed the donor to distribute $1.36 million to their preferred charities.

Had they simply donated the original $1 million directly to charities back in 1998, that would have been the one-off direct impact achieved. Instead, by playing the long game, our client has ensured ongoing giving over the decades, totalling well in excess of that initial $1 million – whilst effectively doubling their capital and ensuring ongoing growth.

Although for a perpetual fund, 20 years is relatively a short period of time, the importance of the sustainable revenue stream perpetual giving creates for the community sector will continue for generations to come.

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