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Include a Charity

include-a-charityInclude a Charity

Giving is for everyone. We all have causes we care about and we all have the power to give money to help those causes. Whether you leave this earth with $10 to your name or $10 million, you can provide for you chosen charity in your will. It is one of the easiest ways to give.

There is a common misconception that donations or bequests to charity are only made by wealthy people. This is not so. They are made by people who care about the communities they live in and the causes they are passionate about. Without the generosity of these people, many of our charities would struggle even harder to survive. There are many reasons why people choose to give; to contribute to the ongoing work of a chosen charity, to leave a gift as a lasting memory or to give back to the community.

The starting point is to choose a charity you would like to help. Do a little research on the areas you are interested in and the organisations working in those areas to find one that is a good fit for you. It is a good idea to make contact with the charity to let them know of your intentions. They will then be able to include your bequest in their future planning. The next step is to contact your solicitor to arrange for your will to be updated. You might wish to leave a fixed sum of money, a percentage of your estate, or a specific asset, such as a property or an investment fund.

Make sure you tell your family and friends about your bequest so they can ensure your wishes are carried out. Who knows, you may prompt them to make their own bequest. For more information click here.

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It’s Poverty; Not Just Child Poverty

Poverty1It’s Poverty; Not Just Child Poverty

Much is being made in the media of the issue of Child Poverty. According to the 2015 Child Poverty Monitor, 29% of our children now live in poverty compared with 15% in 1984 and three out of five children in poverty live this way for many years. But poverty is not restricted to children. The focus on child poverty is politically driven; it appears in the media on a regular basis at Christmas time and in election years. Children add an emotional dimension to the issue which attracts more attention, but the reality is adults live in poverty alongside children, and without children. Poverty is endemic amongst the elderly. Many adults in poverty are likely to be women either bringing up children alone or living alone in old age.

Poverty is never more obvious than at Christmas time. Financial stress is no doubt a significant factor in the increase in domestic violence at this time of year, and the increased demand for budget advice. Debt levels rise, trapping people further in poverty.

Living in poverty is not something people do by choice. There are multiple causes which require a multi-pronged solution. Governments can address poverty through stimulating economic growth and providing low cost housing and financial support. However, there is much that can be done at the grass roots level in local communities, through charitable organisations working directly with those living in poverty. They simply require more resources to do their work. Poverty is a community problem, not a Government problem. It’s poverty, not just child poverty, and it can be eliminated by building strong local communities who pool their economic resources to help those who have less. This Christmas, think about what difference you can make in your local community by supporting charitable organisations working with those in need.

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Giving Back

GivingGiving Back

When we leave this world, we take nothing with us, but what we leave behind can make a big difference to others. It is usual for surviving family members to be the beneficiaries of an estate but increasingly, charitable organisations are benefiting from the generosity of community-minded testators. The purpose of leaving behind assets for the next generation is to contribute to their well-being. Insightful people recognise that while money contributes to well-being, so does community support. A thriving community in which people support each other is essential to well-being and happiness. Thriving communities attract new residents, employment and economic growth. So if your intention is to secure the future of your descendants, think about leaving part of your estate to organisations that provide community support and enrich people’s lives. These days, families tend not to stay in the same place. However, if each of us gave back to a community that provided support during part of our lives, all our families and future generations would be taken care of.

Giving is not just for the wealthy. Whatever the size of your estate, whether it is $50 or $50 million, a portion can be set aside. Perhaps ten percent is a reasonable portion to give; it’s a big enough portion to make a difference to your community, but small enough that it shouldn’t be missed by the other beneficiaries of your estate.

Throughout New Zealand there is a network of community foundations which provide a vehicle for people leave a gift for their community. Funds are pooled and invested in perpetuity, with the returns from the investments being paid out to charitable organisations. More information is available here. Gifts can be made during your lifetime too, which means you gain the satisfaction of seeing the difference you have made.

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Give And Be Happy

Give And Be Happy

Stephen Tindall is one of the wealthiest men in New Zealand and also one of the most generous. The Tindall Foundation gives away millions of dollars every year. Stephen says the satisfaction he gets from the Tindall Foundation is greater than what he received from turning The Warehouse into one of New Zealand’s most successful companies.

As well as giving directly to charities, the Tindall Foundation provides core funding for  Community Foundations so funds can be channeled according to the needs of each community as determined by local trustees. There are currently eleven Community Foundations throughout New Zealand.

Community Foundations play an important role. They provide a means by which people can make a gift to their local community either during their lifetime or through their will. The funds received are invested in perpetuity and the interest is used to support local charities. Donors can specify the charities they wish their funds to go to. Run by voluntary trustees, Community Foundations have very low operating costs, making them a cost effective way for people to leave a lasting legacy for their community.

Bill Holland of the Acorn Foundation advocates using what I call “The 90/10 Principle” for bequests. When you are writing your will, consider leaving 90% of your estate to your family and 10% to your local community. After all, your children have benefited from the charities in your local community while they have been growing up. Bequeathing 10% of your estate is a way of paying them back and ensuring that the next generation will continue to be supported. If your estate is worth $500,000, will your children really miss $50,000?

According to Kevin O’Connor, Chairman of the Nikau Foundation, “the happiest people are not those who get more but those who give more”. I agree.

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An Ethical Dilemma

Problem Gambling

A gambling bill which will change how the proceeds of gambling are managed and distributed is in the process of being debated. The Gambling (Gambling Harm Reduction) Amendment Bill will give councils the power to eliminate or reduce pokies at a venue if the public feels they are harmful, replace corporate societies that distribute proceeds with local committees and ensure that 80 per cent of gambling proceeds are returned to the local community. These changes are being driven by the need to address problem gambling, particularly in lower socio-economic groups.

There is a cost to the proposed changes, however. Profits from gambling machines are one of the largest sources of funding for charitable organisations. Cut back on gambling and you cut back on charities who are working to improve the wellbeing of the community including, ironically, the victims of problem gambling. Problem gambling should be addressed at its root cause as well as by limiting the number of pokies. 

Revenue from gambling needs to be kept to a level that communities feel is acceptable, but other funding lines should be put in place, at least in the short term, to preserve the work of organisations that have relied on grants funded by gambling.

Making grants to charities is a specialist field.  How does the grant maker decide which charities are worthy of funding and which aren’t? Should the available money be spread evenly in small amounts amongst a large number of charities or given in a few large amounts to projects that will really make a difference? How can local communities decide what charitable support is required?  Grant making should be done by committees with the specialist expertise and local knowledge required to ensure funds are directed into the charities that have the most beneficial impact on the local community.

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The Plight of Charities

The Plight of Charities

It’s been a rough year for charities and my guess is that over the next year, some very worthy organizations will be forced to close up shop. There are many factors working against charities at present:

  • The Christchurch Earthquake has sucked up a huge amount of money from the big charitable trusts, leaving little behind for charities who have in the past relied on those trusts for funding.
  • Government funding for many programmes delivered by charities has been cut back.
  • While revenue is dropping, operating costs are going up.
  • With the economic downturn, more people require assistance from charities and fewer are able to make donations.
  • We are becoming an increasingly cashless society, leading to reduced revenue from street appeals.

Charities are being forced to think outside the square when it comes to funding. At the leading edge are organizations moving towards ‘Social Enterprise’, which is a blend of enterprise, capitalism and philanthropy. They fund their charitable objectives with profit made by selling products and services. In some cases, these organizations are able to raise funds from investors on which they pay a modest return. Social impact bonds, which are being trialled in several countries, raise money from investors to fund delivery of preventative social services. If the social outcomes are achieved, the government pays back the money to the investors and adds a success payment. There is no reason why social enterprise needs to be driven by charities. From the other end of the spectrum, large companies are seeing benefits in applying some of their profits for philanthropic purposes under the banner of ‘Corporate Social Responsibility’. What a different world we would live in if this combination of enterprise and philanthropy became the norm for all businesses, charities and government.

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The Benefits of Being Generous

Giving is Good

It feels good to be generous and it’s even better when generosity is rewarded. In recent times, there have been a number of changes and new initiatives that have made it easier and more beneficial for ordinary people to give to others.

 In 2007, a number of groups working in the charitable sector got together to form the Generosity Hub. The aim of the Hub is to create better awareness of giving in New Zealand. Giving includes money, time, gifts and acts of kindness. The vision for the Generosity Hub is a society where giving is the norm, where generosity is recognised and celebrated and where giving is supported by government, business and the community.

 There are several projects underway, including a project to increase awareness of payroll giving. Payroll giving is a scheme introduced by Inland Revenue which enables employees to make a donation to registered charities and receive the tax benefit from the donation straight away. Employers can choose whether or not they offer this scheme to employees. The advantages of the scheme are:

  • Tax benefits are immediate and are 33.33% of money donated with no upper limit
  • There is no need for the employee to file a return to IRD
  • It is easier on the pocket to donate by small, regular amounts rather than larger lump sums
  • All funds go directly to the charity with no ‘middle man’ costs from telemarketers or advertising  campaigns

Other projects of the Generosity Hub include encouraging ‘giving circles’ to involve more people in giving time and money and promoting a ‘three money box’ idea for children (one for spending, one for saving and one for charity).

 This is the season for giving and a good time to think about how you can be generous to others.

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