Here’s a common question we come across when working with aspiring philanthropists. “Why would I set up a charitable giving structure when I can just give directly to a charity instead?”
It’s a great question, and to answer it, here are 4 key reasons why setting up a formal giving structure such as a Charitable Fund Account (sub-fund of our Public Ancillary Fund) with the Be BlueRock Foundation, or your own Private Ancillary Fund (PAF), is a better option than donating directly to charity.
Choosing the right charities to support isn’t easy and shouldn’t be rushed. But if you want to benefit from the tax deduction in the current financial year, you can establish a PAF or Charitable Fund Account before 30 June, claim your full tax deduction (or spread it across 5 years), and have 12 months to figure out where the distributions will go. All while the money is invested and growing. Win win!
Setting up a giving strategy with a formal structure enables you to create a legacy that will live on long after you’re gone. While you can leave bequests in your will, why not start the giving process while you’re around to enjoy it? That way you can establish a defined pattern of giving, involve your family members and really give purpose to your wealth.
If you set up a Charitable Fund Account within BlueRock’s Public Ancillary Fund, you can amplify your impact by soliciting donations from the public. This means that you can fundraise for causes you care about and direct the funds to your chosen charities, all in the name of your own sub-fund.
As the money in your fund is invested, the value of your fund will grow over time, meaning the distributions you make each year will grow. This not only enables you to have a larger impact over the long term, but if you provide ongoing support to specific charities, it helps them with budgeting as they’ll know to expect a donation from your fund each year.
The Moss Trust is a testament to the remarkable impact of a Charitable Trust. Harry Lyons Moss, a prominent investor and financier, decided to create a lasting contribution to the Royal Children's Hospital (RCH) in Victoria when he was drafting his Will. After providing for his daughter and employees, he opted to establish a charitable trust that would provide perpetual income to the respected institution.
Mr Moss began his Charitable Trust with a starting capital of £1 million in 1960, and today, it’s worth over $80 million. The RCH benefits from a financial contribution each year that exceeds the original amount that Mr Moss left in his trust. His foresight ensured that the institution continues to receive funding every year.
Think about it this way. If Mr Moss had given his £1 million to the RCH in the 1960s, it may have been spent on constructing or upgrading a wing of the hospital, acquiring the latest medical equipment, or outfitting surgical rooms. But the original RCH building was demolished to make way for a new hospital in 2011, and any medical equipment purchased in the 1960s would now be outdated.
Instead, the Harry Moss Trust has distributed more than $60 million to the RCH since its establishment. These funds support specialised medical research into children's illnesses and conditions, leadership and training, the annual purchase of new, cutting-edge equipment and technology, and the highest standard of care. Talk about leaving a lasting legacy! The Harry Moss Trust remains a remarkable example of the power of a Charitable Trust.
Want to talk to our Philanthropy Consultants about setting up a Charitable Fund Account, or a PAF, and building a legacy that will have a positive impact in perpetuity? Whether you’re still figuring out the best approach, or you’re ready to get it set up before June 30, our advisors are here to help.