How generosity can be part of your financial plan

It’s the season for gifts, sharing meals and spreading cheer. But what if your festive generosity could do more? What if it could ripple through generations, perhaps shaping futures and maybe reduce your tax bill?

Giving isn’t just an act of kindness; it can also be a smart financial move. From helping loved ones today to creating a legacy for future generations, strategic gifting can align with your broader financial goals.

After all, Australians are generous. We consistently rank among the most charitable in the world with a study showing that, in the past year, 56 per cent of Australians have donated money and 31 per cent have donated their time.ⁱ

Australia, as a wealthy but ageing nation, is well-placed to grow charitable bequests, but the reality is less encouraging. The number of people leaving bequests to charities is low and the size of the bequests also ‘falls far short of international peers’, according to The Bequest Report by JBWere.ⁱⁱ

Why planned giving matters

Often, giving is reactive rather than planned. We might respond to a donation drive, an emotional TV ad, a friend’s fundraiser or gift property or shares to a family member.

But giving can also be intentional. Some people choose to set aside a portion of their annual income, commit to monthly donations or include charities in their wills. Others join workplace giving programs or support causes that reflect their values. In this way, generosity becomes less about impulse and more of a conscious decision.

There may be advantages in taking a more strategic approach. It can amplify your impact, build your reputation, open doors to new networks and potentially deliver tax benefits. Donations to organisations with deductible gift recipient (DGR) status can help to manage your tax position by reducing taxable income. If you give more than $2 to an organisation with DGR status, you can claim a 100 per cent tax deduction for your donation.ⁱⁱⁱ

Planned giving can help to create a lasting impact, building a legacy for family and community. It integrates generosity into financial planning, ensuring investments reflect personal or family values. In this way, it becomes a tool for involving younger generations in financial governance, teaching responsibility and shared purpose.

Strategic gifting can include early inheritance, education funding or contributions to a family trust. These approaches can reduce future taxes on your estate.

Structured giving options for lasting impact

For those looking to make a lasting impact on their communities, structured giving vehicles offer flexibility and control.

It can create long-term financial stability to favourite causes, providing predictable funding for charities. It can potentially reduce complexity in estate planning and ensure your wishes are carried out; and donating assets may offset capital gains tax liabilities.

Unlike mass market or other forms of giving, such as direct donations to charities, crowd funding and volunteering, structured giving involves using a vehicle designed to enable giving such as:

• Private Ancillary Funds – often used by families and individuals able to make a minimum initial contribution of $500,000 with a plan to grow the fund beyond $1 million.

• Public Ancillary Funds – suitable for those with a lower entry point of $20,000

• Community foundations or giving circles – enable donors to pool resources for local impact. Entry levels can be as low as $2,000.

• Donor Advised Funds or sub funds – a simpler, more flexible structure allowing donors to distribute funds over time. They can be established relatively quickly with some recommending an initial donation of a minimum $20,000.

Structured giving can also occur without using a dedicated vehicle through, for example, corporate cash donations or larger scale and planned contributions from individuals and families.

Giving isn’t just about generosity, it’s about creating a lasting impact.

We’re here to help you create a giving strategy that supports your family and backs the causes you care about.

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^{This article is general in nature and has not been tailored to individual circumstances. Before acting on this information, you should assess your own circumstances or seek personal advice from a licensed financial adviser. This article is current as at the date of issue but may be subject to change or be superseded by future publications. While it is believed that the information is accurate and reliable, the accuracy of that information is not guaranteed in any way. Past performance is not a reliable indicator of future performance, and it should not be relied on for any investment decision. Whilst care has been taken in preparing the content, no liability is accepted by the Licensee nor any of its agents, employees or related bodies corporate for any errors or omissions in this publication, and/or losses or liabilities arising from any reliance on this information.}

i World Giving Index | CAF
ii Bequest Report | JBWere
iii Inquiry Report – Future Foundations for giving | Productivity Commission