New Zealanders have always been good at giving to others. Whether it is selling sausages, baking for a cake stall or running errands for elderly neighbours, most Kiwis pitch in at some stage in their lives to lend a helping hand. Our generosity is also to be seen on collection days for charities and in the regular donations made to favourite organisations. Some people are lucky enough to have more money than they will ever spend in their lifetime. For the super-rich, establishing a trust or foundation to make charitable distributions is a way of using surplus wealth to benefit others. The Tindall Foundation, JR McKenzie Trust and Todd Foundation are examples of such organisations which will continue to do good things beyond the lifespan of their founder donors.
Setting up your own charitable trust is an expensive and complex business. It involves preparing the trust deed, administration of the trust, making charitable donations and compliance with regulations for charitable organisations. Smaller trusts often struggle to find trustees once the founder donor has passed away, and poor management often results in funds diminishing over time to a point where meaningful donations can no longer be made.
A simple solution for those with a philanthropic bent but without a massive fortune is to establish a donor-advised endowment fund where funds are invested and the returns distributed in accordance with directives from the donor. Endowment funds are cheaper to administer, more tax efficient and flexible to operate. They can be established with modest amounts of money, making them accessible to everyone. Community Foundations of New Zealand is a network of sixteen local community foundations which offer donor-advised endowment funds. They provide an easy and inexpensive way for people to invest part of their wealth forever, for the benefit of their local community.