Article by Joanna Mather, Wealth Editor, AFR
Joanna Ryan is one of several women who made $1 million donations to the Sydney Women’s Fund this year.
Another is Georgina Byron, the chief executive of the Snow Foundation and daughter of late Canberra property developer Terry Snow AM.
Both are directing money to charities that support women and girls because they believe it is the best way to elicit lasting change.
It’s a sign of the times, says Loredana Fyffe, the chief executive of the Sydney Community Foundation, which runs the women’s fund.
“There is a groundswell among women who want to give, either as individuals or in a group with family and friends, and this coincides with more women taking charge of their finances,” she says.
“We’ve always had a donor base of generous philanthropic women, but this is the first time we’ve received multiple donations over $1 million.”
The other key trend at play is the growing popularity of structured giving as opposed to single lump sums.
“Structured giving allows donors to front-load multiple years of tax deductions into a single tax year, maximising the full tax benefit when it’s really needed, such as after selling an asset with a significant capital gain or receiving a substantial bonus,” Australian Philanthropic Services Foundation head Rachael Rofe says.
“Donors can secure an immediate tax deduction while retaining the ability to distribute the balance to their favourite charities over time.
“This flexibility is particularly helpful for those facing time pressures before June 30, allowing time for thoughtful distributions to the community over time without the stress of making a large, immediate gift to a single charity.”
Private ancillary versus sub-fund
Viridian Advisory executive advisor Kathy Havers says there are three options for giving: direct donations; private ancillary funds or foundations; and philanthropic sub-funds, “which is probably the least known about”.
“The number one thing for a direct donation is, sadly, it’s a one-off, and often overlooked by the receiver in future years because it was done years earlier,” Havers says.
“The private ancillary fund alternative requires a commitment to administration and [it] can be prohibitive for many clients to make that worthwhile due to the ongoing administration and potential costs and time to run.
“The sub-fund is a great, streamlined solution that sits in the middle of that.”
A sub-fund (also known as a donor-advised fund or named fund) sits within a community foundation’s public ancillary fund. The minimum annual distribution is 4 per cent.
Community foundations will typically take care of compliance and administration for a small fee. They also do due diligence on charities.
“Sub-funds are gaining in popularity due to the ease with which they can be established, and the lower administrative burdens and costs,” Fyffe says.
In the case of the Sydney Community Foundation, there is no set up fee and the sub-fund can be operational the same day the establishment donation is made.
