For professional advisers

As the peak body for philanthropy in Australia, we connect funders, advisors and grant-seekers to best-practice expertise at our professional development, learning and networking events.

As a professional adviser, you play an important role in growing giving in Australia.

The most effective way you can encourage giving is by talking with your clients about philanthropy.

Here, we explain the key elements of giving, including motivations, triggers, giving structures and responsibilities.

Whether you’re looking to integrate giving into your practice or refer your clients to a specialist, there are many benefits of engaging with your clients about philanthropy. This includes:

• building trust and rapport with your clients
• providing more holistic advice
• sustaining long term relationships
• retaining clients across generations
• facilitating more effective giving
• helping clients to maximise tax benefits.
• You can download this information in more detail in our Professional Adviser Guide to Giving.

Understanding why people give

Understanding your client’s motivations to give will help you to provide tailored advice and guide your client to be more effective in their philanthropy.

Giving tends to be a personal journey, motivated by external factors. Recognising these factors will help you to raise the topic of giving at the right time, and build trust and rapport with your client.

Passion

The strongest reason why donors give. Clients support causes they identify with and are committed to.

Key signs: Volunteering, social engagement or personal engagement – for example, art collection.

Legacy

A desire to continue the family name or perpetuate a particular cause or passion.

Key signs: No direct beneficiaries.

Responsibility of wealth

Wanting to address significant intergenerational wealth transfer. Desire to engage family and future generations.

Key signs: Estate planning, succession planning or transfer of family business.

Sense of duty

Wanting to give back to the services or support they – or someone they know – received.

Key signs: Commitment to a cause or organisation – for example, a school or hospital.

Community

A desire to strengthen their local community.

Key signs: Identify with issues in their community or society and want to make a difference.

Tax minimisation or liquidity event

Having an income/cash event and have a sizeable tax liability.

Key signs:

• sale of a business, shares, property or other asset
• significant inheritance, gift or lottery win
• high taxable income or high capital gains tax.

Change in personal circumstances

Rethinking life and priorities when personal circumstances change.

Key signs: Significant life events – for example, marriage, divorce, retirement, redundancy, death in the family, accident, injury, serious illness, recovery.

Ways to give

There are many ways to give. The type of structure you choose will influence the legal, financial and operational requirements and fees.

Understanding your client’s needs and options will help you to provide informed and correct advice.

Direct giving

Clients who give a relatively small amount or for a short period may not need to set up a philanthropic structure.

For clients who give directly to charity, advice may be limited to ensuring donations made to deductible gift recipients (DGR) are taken into account when finalising taxable income.

See Direct giving.

Structured giving

If your client is interested in thinking about their giving in a more strategic way, structured giving may be for them. Structured giving options are designed to encourage long-term, sustainable giving.

For clients with capacity and interest in structured giving, advisers can become involved in the ongoing management of the giving structure or foundation.

See Choosing the right philanthropic structure.

Giving Guide questionnaire

We have created an online questionnaire to help professional advisers talk to their clients about giving.

The Giving Guide asks your client questions about their current giving. Based on their answers, the guide provides some next steps on what philanthropic structure may be suitable when considering a giving strategy.

You can work through the guide together or your client can complete the questions separately and then discuss their responses with you.

Complete the Giving Guide questionnaire

Managing a foundation’s investments

When a client decides to structure their giving, advisers should be aware of the roles and responsibilities involved in the ongoing management of a foundation or sub-fund of a public ancillary fund.

Charitable trusts are often established with the intention of existing in perpetuity. Donations made to a charitable trust need to be prudently managed to ensure the fund meets its stated investment objectives and distribution requirements.

An investment adviser needs to know about the risks to charitable investors as well as any available tax concessions.

In addition to the traditional asset classes, trustees may also consider ethical and impact investment options. These considerations should be documented in the charitable trust’s investment strategy.

Amendments to your client’s Statement of Advice (SoA) may also be required.

Professional advice and guidance

If you are unsure about setting up a structure, your client will appreciate you referring them to a service provider that can help.

We have compiled a list of Philanthropy Australia members who can offer these services. Some will set up the structure for you to manage the corpus (investment portfolio), while others will manage it for you.

See Philanthropy Australia’s professional adviser members and services.