Why philanthropy is a growing part of financial advice and estate planning services
Philanthropic Giving for all Australians
Financial advisers, accountants and estate planning lawyers are starting to encourage clients to consider structured giving as practising philanthropy becomes more accessible.
The philanthropic sector is being reshaped by contradictory forces. Deductible donations have increased as a share of total income, but the percentage of taxpayers making donations has fallen.
The COVID‑19 pandemic, natural disasters, and the rising cost of living have underlined the crucial role played by charities even as social capital has declined, with people becoming more insular.
But professional advisers, including financial planners, accountants and estate planning lawyers, are beginning to help change the situation. Awareness is rising about more accessible ways to create sustainable philanthropic strategies amid a push by government to double current levels of philanthropic giving by 2030.
“Clients are often surprised to learn about other ways to give,” says Equity Trustees National Manager, Estate Planning, Michael Crowe. “They love that they can give into perpetuity rather than just making a one-off gift.”
A previous study found that three-quarters of advisers in 2014-15 viewed philanthropy positively but were held back from promoting it by a lack of organisation and professional association support. But as education is rising, so too are client discussions around giving intentions and often an opportunity around inter-generational philanthropy.
“Some of the questions we encourage advisers to ask is: are clients giving already?” says Equity Trustees Relationship Manager, Active Philanthropy Denise Cheng.
“Do they give at tax time, support their local community, support the kids school, or are they volunteering – if they’re already giving the chances are there's some altruistic tendencies.
“The main triggers to wanting to give are often a windfall such as selling a business and they need a tax deduction, or a change of status, such as getting married, divorced, or a loved one passing away.”
One-off donations around the end of financial year are popular because of tax deductions, but structured giving can provide a greater impact for the community and connection for donors through a more sustainable philanthropic structure.
Yet structured giving only comprised about one-fifth (20 per cent) of total charitable giving in 2017-18 (the latest data available), according to Philanthropy Australia.