Advisers can benefit from the spirit of giving

Encouraging clients to engage in philanthropic activities in the lead up to Christmas can assist financial advisers in strengthening the advice relationship, according to Australian Unity Trustees.

While giving increases as the festive season nears, Australian Unity Trustees' executive general manager Emma Sakellaris is reminding advisers that one-off charitable donations don't provide a sustainable solution for the hardships their clients are wishing to relieve.

"All charities depend on donations and are very appreciative of them.  However it is regular, recurring giving that provides the most benefit," Sakellaris said.

"Charities can confidently implement longer term projects if they know that they are going to receive regular funds. Additionally they don't need to use precious funds and resources for fundraising projects and activities, so a much greater portion of funds can be directed to community members in need."

Advisers can ensure their clients are capable of making the recurring donations they want to through the establishment of a charitable trust, she said.

"Unlike ad hoc donations or even recurring donations, charitable trusts are designed to grow capital over time, whilst generating sustainable income for granting," Sakellaris said.

Such structures are not reserved for the wealthy either as a trust can be established with $20,000. They also provide the peace of mind that money is directly supporting causes which are meaningful to clients.

"While this may seem a reasonable amount, deductions from the initial donation can be spread over five years, and all subsequent donations made to the trust are tax deductible," she said.

Many philanthropists like to involve family members across all generations in their charitable giving, Sakellaris added.

"The donor, family and friends can donate to the trust, which will further grow the capital and therefore further grow the income generated for distribution to eligible charities. Additionally, instilling the idea of helping those less fortunate with grandchildren at an early age can be an enjoyable and fulfilling family endeavour," she said.

The experience of Australian Unity Trustees is that advisers who raise philanthropy with their clients during this period find the process reinforces the foundations of that relationship.

"What better way for you to better understand a client's philanthropic intentions, further strengthen your trusted relationship, and establish long-lasting relationships across multiple generations, many of whom may choose to maintain and grow the charitable trust well after the original donor passes," Sakellaris said.

Read more: Australian Unity Trusteesfinancial advisersChristmasEmma Sakellarisfinancial advicefinancial planningphilanthropy
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