Social media driving global philanthropy beyond June 30

From

Emma Sakellaris

The increasing influence of social media platforms and crowdfunding globally means traditional philanthropy is evolving, but for many June 30 still remains a key date for tax planning, says Emma Sakellaris, executive general manager, Australian Unity Trustees.

Statistics shows that giving in Australia is on the rise, increasing $1 billion to $121 billion over the past two years and that women in Australia now donate significantly more than men, Ms Sakellaris says.

“In addition, the rise of online platforms and crowdfunding has made philanthropy both more accessible and more attractive for many people.

“As a result, people are more likely to think about charitable giving throughout the year.

“Nonetheless, clients should now commence thinking about 30 June, and whether contributing funds into charitable giving structures may be of benefit – clients should be very careful not to leave this process too late in the financial year.”  she warns.

“For one-off donations, it is important to ensure the charity receives the donation by June 30 – not just that you have made the donation by that time.

“For many, however, the one-off June 30 donation gives rise to philanthropic interest that becomes more structured and focused over time.”

She says that initiatives such as crowdfunding philanthropy – utilising social media and technology platforms – are having a significant impact on the way people give.

“Social media is becoming a key influencer and there is a move towards individuals promoting their charitable giving and motivating others to give, particularly amongst the younger generations.

“It is a time of significant, unprecedented change in the philanthropy sector globally, including an emerging cohort of substantial donors contributing directly to highly impactful community projects.

“This shift has continued to increase donor interest in concepts such as impact investment.  Many charities have been hit hard as a result of this shift and continue to be reliant on consistent grants through charitable foundations, structured giving and bequests.

“While more traditional grant-making via structured giving contributes critical funding to charitable initiatives and remains a key component of tax planning, at the same time significant global events, such as unprecedented natural disasters or mass people displacement have shaped community movements toward fund raising.

Collaborative giving in Australia has grown exponentially and now reflects similar trends evident in countries such as the US.

“Through mediums such as ‘selfies’, status updates, videos and ‘local hero’ style fundraising, charitable giving is becoming commonplace rather than the confidential almost secretive style of giving that has typically been the trend in Australia.  We are becoming more open about our philanthropic passions.

“This type of philanthropy is often locally based and contributes to the further development of community care and support. In many ways it is a social leveller. When people contribute to a shared cause through a medium such as GoFundMe, contributor details, such as level of wealth, are not apparent. Instead, the medium simply connects an often large, potentially global, community who feel compassion and motivation to contribute varying amounts to a particular cause.”

Ms Sakellaris said that despite misconceptions, philanthropy is not the exclusive domain of the extremely wealthy, with middle Australia increasingly becoming involved in the structured giving narrative, for a variety of reasons.

“Middle Australia are appreciating that they are comfortably well off and wish to give back during their lifetime. Whilst most still provide for their children in their Will, many do not intend to leave everything they own to the family, who are often comfortably well off in their own right. Rather structured charitable giving either during their life or as bequest in their Will, becomes a priority.

“A sub-fund in a charitable trust can be established with an initial donation of $20,000. While this may seem a reasonable amount, the tax deduction from the initial donation can be spread over five years, and all subsequent donations made to the trust are tax deductible.

“Unlike ad hoc donations or even recurring donations, charitable trusts are designed to grow capital over time, whilst generating sustainable income for granting.

“The donor, family and friends can all donate to the trust, and claim the tax deduction. This will further grow the capital and therefore increase the income generated to distribute to eligible charities.”

Ms Sakellaris says we are increasingly seeing more focus on sustainability and meaningful philanthropy that leaves a lasting impact or legacy as one of the key reasons why people chose to give.

“The advantage of a structured philanthropic legacy is that it allows people to give back to the community, now and into perpetuity, not just through ad hoc donations,” Ms Sakellaris said.

“It allows them to develop long-term charitable approaches that make a real difference to the community.”

“All charities depend on donations and are very appreciative of them.  However it is regular, recurring giving that provides the most benefit.”

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