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3 min read

Why advisors should be talking to their clients about community foundations

Profile of George Krithis, Principal, DFS Advisory Services
Written by George Krithis, Principal, DFS Advisory ServicesPosted on 2/4/2023

With each end of financial year, many of our minds turn to tax mitigation. Philanthropy is a simple and rewarding option.

As advisors, you don’t need to be experts in charitable giving and philanthropy, but you do need to know the best time to raise the subject, what the giving options are, and support and guide your clients so they can achieve their philanthropic goals.

Recent research from Netwealth indicates that legacy giving and philanthropy more broadly have become more important for clients over the past decade, with 82 per cent of respondents actively working to grow their giving in the short and long term.

In my role as a Principal and Strategic Adviser with DFS Advisory Services, I have specialised in dealing with high-net-worth individuals and have previously referred clients to community foundations to pursue their philanthropic interests.

I recommend Australian Communities Foundation to my clients because they have deep expertise in this area, they are non-institutional (removing many of the biases that prevail across the financial services industry), and are a very cost-effective, flexible giving solution. It is the Foundation’s expertise in philanthropy and charitable giving that gives me the confidence to refer my clients. Our clients have also valued being part of an ongoing journey, sharing a giving solution with other donors that is community-focused.

If your clients are seeking to reduce their taxable income before the end of financial year, there’s still time to establish a fund within a community foundation, such as Australian Communities Foundation. Unlike a private ancillary fund (PAF), with Australian Communities Foundation there is no requirement to establish a new trust or trustee company. A fund can be established quickly and easily within a public ancillary fund structure without any setup costs.

What is a community foundation and how does it work?

A community foundation is a not-for-profit organisation established to help build local communities. By connecting communities in need to generous people with philanthropic ambitions these foundations help provide communities with the resources they need to create stronger, long-lasting solutions to specific issues. A personal fund with a community foundation gives donors the ability to achieve immediate impact with their philanthropy as well as establish a long-lasting legacy.

Why choose a community foundation?

Australian Communities Foundation is Australia’s largest independent not-for-profit community foundation and is committed to helping donors make informed decisions that lead to meaningful impact.

Many famous names such as Facebook founder Mark Zuckerberg and GoPro founders, Nicholas and Jill Woodman, have chosen their local community foundations as a vehicle for their giving for good reason. They offer a unique vehicle for giving which allows donors to engage with the community, gain knowledge, connect with other donors, build an understanding of the not-for-profit sector, and ultimately, give wisely.

The ATO has more information about public ancillary funds available here.

The benefits of community foundations:

  • It’s an easy alternative to setting up a private foundation. A fund with ACF can be set up within 24 hours and there are no set-up fees. They also handle all due diligence to ensure your gift is managed responsibly and ethically.

  • Donations to funds within the foundation are tax-deductible. All earnings within the fund are exempt from tax.

  • Donor involvement: Australian Communities Foundation offers access to a rich array of workshops, forums, and networking events – all of which enable donors to build their knowledge and involvement in philanthropy.

  • With flexible products, expert advice, guidance, and ongoing support, ACF can help your clients implement a giving plan that makes a significant impact.

If you want to learn more about philanthropy and which giving options may be best suited to your clients, learn more about Support for Professional Advisors.