It can be more blessed to give
CHARITY begins in June for many Australians as they think about spreading some generosity and snapping up a tax deduction before the financial year ends.
Almost two-thirds of Aussie taxpayers do not claim tax deductions for donations, according to the latest Australian Taxation Office figures, but those 4.5 million donors who do claim give about $2.3 billion a year.
If you’re sharing some love with those less fortunate, make sure you are benefiting both charities and yourself.
Wealth management group Koda Capital’s partner and head of philanthropy, David Knowles, says people should give with a sense they are making a difference.
“Follow what is happening with your money, involve your friends and family, and look beyond stories to find well-run charities that can show the impact they have,” he says.
But getting involved does not mean demanding where your money goes once you’ve donated it.
Let the people running the charity decide how the money is spent because they know what the need is, says Knowles.
“Some people want to put conditions on it and don’t want their money to go towards administration and salaries – but the administration or salaries might underpin everything the charity does.”
CHECK IT’S LEGIT
Charity scams are rare but are there, so do your homework.
Knowles says you can research charities on the government’s Australian Charities and Not-for-Profits Commission website acnc.gov.au.
You also can check that if it’s a deductible gift recipient – which means your donations over $2 are tax deductible – on the abn.business.gov.au site.
Oxfam’s director of public engagement, Pam Anders, says you should understand the projects in which the charities invest.
“You have so much information at your fingertips and should be able to do your own research about how transparent an organisation is,” she says.
LOOK BEYOND JUNE
Anders says June is the busiest time of the year for many charities, which often run appeals to tap into people’s endof-financial-year planning.
“Many people are reflecting on how well their year’s gone and if they can afford to give a bit more, particularly as a means of legally reducing their taxable income,” she says.
Donations can deliver a bigger bang if you spread them out over the year, perhaps with direct debits from a bank or credit card account. Small donations every month will add up to a sizeable tax deduction in July, and are easy to set up online or over the phone.
“At some workplaces,you can have payroll giving where you can make your donations before tax,” Anders says.