JUNO INVESTING ©

An Easy Way to Give

JUNO INVESTING ©
An Easy Way to Give

 

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SPRING 2017

By Julia Capon, The Gift Trust

Let your financial adviser take care of your investments for charity using a method of giving that’s new to New Zealand, writes Julia Capon.

Traditionally, a budding philanthropist starting their giving journey would either give directly to a charity or set up a foundation. Today, there’s a new way to give. 

Many donors are trying an alternative giving method: Donor Advised Funds (DAF), a ‘giving account’ held by a not-for-profit organisation.  

DAFs are like a savings account for your giving dollars – the equivalent of a ‘personal foundation’, but without the administrative hassle. 

A donor places a non-refundable donation into their giving account and receives an immediate tax deduction. The donor can then choose which charities they’d like to make grants to, and when.

The biggest difference to traditional foundations is that these funds can be managed by your existing financial adviser, alongside your personal investment portfolio. Your charitable donations can be invested for growth over time, while getting tax-free growth.

International trend

They’re new to New Zealand, but DAFs are the fastest-growing form of philanthropy in the United States. And now they’re growing in popularity around the world. 

In 2016, US$78.64 billion was held in DAF accounts in the US alone, with more than 269,180 individual donors. And this money isn’t just sitting around in investments or endowments – more than US$14 billion was handed out to charities during the year.

Now a new partnership between The Gift Trust and specialist financial services firm Consilium offers Kiwi givers the first New Zealand DAF opportunity.

Ben Brinkerhoff, head of partner firm services at Consilium, moved to New Zealand in 2011, after working for a successful US financial firm. He was surprised to find hardly anyone was offering donor-advised giving in New Zealand, he says.

New partnership

The Gift Trust, a national charitable trust operating donor-advised accounts in New Zealand since 2009, has formed its first partnership with Consilium, enabling a growing network of financial advisers to offer this DAF product to Kiwi philanthropists. 

Financial advisers can support their client’s giving, and donors get the advantage of having their gift funds invested by their own trusted adviser. 

Cheryl Spain, manager of The Gift Trust, says the new collaboration allows financial advisers to offer an extra service to their charitably-minded clients. 

“They can support their clients to also reach their charitable giving goals. Through the Consilium platform, these clients will be able to track their personal investments, alongside their gift account investments.”

It’s not just about writing a cheque to the donor’s favourite charity once a year. The Gift Trust also helps donors by checking out each charity to make sure they’re maintaining their charitable status. 

Quick-start account

A gift account can be up and running almost instantly, with a first contribution starting from $5,000, and no set-up fees. 

Sue Barker, lawyer and charity specialist, says: “The administration and ongoing compliance involved in setting up a personal foundation can be onerous and risky.

“A gift account allows The Gift Trust to look after those requirements, so the donor can focus on what they really want to do with their gifts.” 

Donor Anake Goodall says he’s excited by this investment opportunity.  

“I’m keen to invest in socially responsible funds, so it will be great to work with my financial adviser to align both my personal investment portfolio and my charitable gift funds with my investment values. 

“The Gift Trust has already made my giving easier. It lets me get straight to the fun part of giving to the causes I care about, without the hassle.” 

What is a DAF?

• Adviser-managed: Gift funds can be invested for tax-free growth with an approved investment adviser.

• Flexible and personal service for donors.

• Consolidates all your giving in one place – just one tax receipt to claim per year.

• Simple, fast, low-cost set-up. A $5,000 first donation. Adviser-managed accounts start from $20,000.

• Donations can be anonymous or named.

• Cheaper alternative to setting up your own foundation.

The Gift Trust – thegifttrust.org.nz