Start Your Giving Plan
Are you working through your 2022 personal financial plan? We set the challenge and asked you to make this year, the year you manage your financial wellbeing and start planning for the future. Your personal financial plan is a collection of plans to help you achieve your financial goals. Achieving your financial goals will allow you the freedom to make choice and live the lifestyle you prefer.
Over the year we will develop your personal financial plan with a guide on each of the areas in the pie chart, including the following:
• Start a Personal Budget
• Start an Expense Reduction Plan
• Start a Debt Reduction Plan
• Start a Savings Plan
In this issue we are looking at the Start Your Charitable Gifting Plan. Throughout the year you have potentially increased you saving, reduced your debt, reduced your expenses, and started investing. Now is the time to start your charitable gifting plan.
With the cost of living rising, continued uncertainty of economic stability, and a barrage of natural disasters many people have been forced to rely of charitable donations to survive. Those in more a fortunate position can help by establishing a charitable giving plan. Adding charitable gifting to your financial plan brings the spirit of compassion and empathy into your financial plan.
There really is no a better time to assess your gifting pattern and potential. You can keep your gifting private and a personal practice, build gifting into an ongoing family legacy or make it an experience to be shared with friends. All the while knowing whichever giving path you choose you are making a difference in the lives of others.
Your giving plan can be diversified or targeted. You may support one specific charitable cause or many different causes. You may support one specific cause but many charities whose purpose reflects that cause. Today there are many apps available that allow you to gift small amounts, and micro-gifting your spare change may be the perfect way for you to meet your gifting plan.
Even if you are not ready to start giving right now, you should still make yourself aware of your options, and what causes are important to you. Building upon this knowledge now will ensure that you are well prepared when you are ready to give back. Aim to commit a regular amount of your wages to giving for meaningful impact.
1. Identify Your Motivations
A good way to start is to identify your motivation for giving. What inspires you to give back? Take a moment to reflect upon what are your charitable motivations. What experiences have left a lasting impression of gifting for you? You motivation might stem from:
• Childhood experiences of volunteering
• Parental encouragement to give back
• Paying forward a charitable act
• Current events inspiring you to act
• Are you passionate about a particular cause
2. Create Your Giving Statement
Your philanthropic goals and the causes you support comes down to your values and priorities. And your priorities may change over the course of your life. But for the moment, consider what is truly important to you and what you are most passionate about today. Once you have pondered your values and priorities, think about phrasing this as your gifting statement. Your giving statement will highlight your vision for charitable impact and combine your values and priorities. Think about the areas or causes you will support, it might be:
• homelessness for ageing women
• funding for emerging artists
• scholarships for education
• funding for a health outcome
• support ambulance, firefighters, or rescue
• funding for disaster relief
Whatever your cause, put it in your giving statement. You might say, I believe no elderly woman should go homeless or worry about where her next meal comes from. I want to become more involved in making an impact by giving to housing and food insecurity charitable funds.
3. Assess Your Risk Profile
There is a phrase, for what you may give: Talent, Time, or Treasure. So, giving can be something other than money. You may have expertise in a service that you can donate. You may prefer to volunteer your time either working in a hands on role or as a Board Member. Or you may donate money, property, or other assets that bring financial reward to the charity. For example, you may have shares that you wish to gift. You may have a shed that can be used for storage. You might even wish to donate land or a house. You may have canned food to give to foodbank. Donating your time and talent is a great alternative if your disposable income is limited.
Think about what you have, what you are prepared to give and whether your giving plan is a commitment of talent, time or treasure.
4. Find Your Causes and Charities
There are many charities and charitable causes to choose from. The best place to start looking is on the Australian Charities and Notfor-profits Commission website. https://acnc. gov.au There are over 60,000 charities listed in the ACNC and of these over 33,000 support
females and close to 36,000 support families. To search the register and find a charity that supports your preferred cause visit https:// www.acnc.gov.au/charity/programs/map and search ‘who the charity helps’. You will find information about when the charity was established, how much income it has received during the year, who the board members are, what charitable causes it supports. You should also look at the charity’s website and speak with the charity to learn more about them. You can also flip back through past issues of WFO or check the WFO website for a list of the charities we have highlighted in the magazine.
5. Tax Deductibility
If you are seeking a tax deduction for your donation, the charity must be listed as a Deductible Gift Recipient (DGR) on the Australian Business Register. To search the DGR status you will need the charities ABN or you can follow the link from the ACNC website. On the ABR website, scroll down the page to find the DGR status. If the charity has DGR status it will display a DGR item. Services in kind, and gifts of shares and property may have capital gains tax, so speak with your tax advisers on the tax effectiveness and impact on your personal financial position.
6. Involving Family, Friends & Colleagues
Your charitable endeavours don’t need to be an individual pursuit. Sharing your charitable giving with friends and family can increase your personal commitment, bring greater personal reward, and help focus your giving in a fun way.
You may build a family giving tradition holding meetings to ensure all are involved and that the causes supported align with the whole family. Or you may start a giving circle with friends, neighbours or your work colleagues, cementing your friendship in a meaningful and impactful way.
You can select several charities, set giving goals and chart your group giving progress. Remember to consciously include everyone’s values and priorities. It’s also a good idea to meet annually to reevaluate and realign the group values, causes, goals and progress.
7. Leaving a Legacy
One final consideration is whether you give now or give later. You may prefer to gift now and see the benefit of your gift immediately. You may consider selling an asset and donating a large amount for your preferred cause. Or you may prefer to gift an amount in your will or via a bequest. You may give a large sum of money to a university or scholarship fund to create an annual prize or create a specific scholarship. A bequest is a formalised way of leaving funds to a charity in your will in a way that cannot be challenged. If you are seeking to leave a legacy speak with your financial adviser and estate planning lawyer to help make this part of your giving plan.
ATO DGR Categories
The Australian Taxation Office (ATO) endorses charities for the following Deductible Gift Recipient categories:
• Health
• Education
• Research
• Welfare and rights
• Defence
• Environment
• The family
• International affairs
• Sports and recreation
• Cultural organisations
• Fire and emergency services
• Ancillary funds
Non ATO DGR Categories
There are four charities for which the DGR status is regulated by other government departments. These are charities that promote the Cultural Arts, Environmental, Harm Prevention and Overseas Aid:
• Register of Cultural Organisations
• Environmental organisations
• Harm prevention charities
• Overseas aid funds
Charities registered as DGRS under these DGR categories are still entitled to receive tax deductible donations.
Giving Platforms
One way to make your donation is to simply set up a regular direct funds transfer to your preferred charity. You can also find charities to support on Facebook. Most charities will have some form of social media account. There are several web-based donation platforms that will accept your donation and pass it on to your chosen charity: https://www.mycause.com.au/ https://www.givenow.com.au
Rewards Based Platforms
Rewards based apps allow you to do your shopping online and send a reward to your chosen charity. The upside is the simplicity of doing shopping and giving on the one platform. You are also limited to the business and charities that are listed on the app, and your purchases may cost a little more. https://isponsorapp.com/
Digital Wallets
We are embracing contactless and digital wallet payments for charitable donations. Commonwealth Bank of Australia (CBA) data show Australians have significantly increased the use digital wallets to make charitable donations. CBA now offer direct payments through their new digital wallet Payto. https://www.commbank.com.au/digitalbanking/pay-to.html
It takes effort to maintain your giving pattern but once established that pattern, with charting you will begin to see your charitable giving going up throughout the year giving you a sense of heartfelt pride in knowing that your giving plan is creating impact and helping a cause that youhave chose to support.
"Commit To Sticking To The Plan"