Where There’s a Will, There’s a Way to Give to Charity

Philanthropy is not just for the mega rich and, at the beginning of the largest intergenerational wealth transfer in human history, bequests provide the chance to leave a legacy, according to financial advisers.

Over the course of Include a Charity Week, 5 to 11 September, legal professionals and financial advisors will be encouraged to ask their clients to consider leaving a gift to charity in their will.

Perpetual national manager of Philanthropy and Non-Profit Services Caitriona Fay told Pro Bono Australia News anyone could become a philanthropist through a bequest.

She cited iconic writer and feminist Miles Franklin as the “perfect example” for how leaving a small amount can have an enormous impact.

“Miles Franklin, who wasn’t a wealthy woman… knew that she wanted to do something for literature in Australia, and clearly it was via her estate that she needed to do it,” Fay said.

“She left £8,922, which is in decimal figures just over $17,000 to set up the Miles Franklin Literary Award, and we know nearly 60 years later the impact that that $17,000 has had on the Australian cultural community and on Australian literature.

“She’s a great example of somebody who didn’t have the significant means to be a philanthropist in her lifetime but has demonstrated herself to be one of Australia’s great philanthropists via her estate.”  

However, the rates of bequests are low compared to general giving.

“At the moment about 70 per cent of Australians give to charity in their lifetime, but only about 12.5 per cent leave a gift to charity via their estate,” Fay said.

“So if we can lift that percentage slightly, with the significant funds going to change hands, we can see an enormous benefit for community organisations and many of the social and environmental issues that our communities are facing.”

More than 100 Australian charities support the Include a Charity Week campaign, led by Fundraising Institute Australia, including the Australian Red Cross, Amnesty International Australia, Cancer Council Australia, the RSPCA, Fred Hollows Foundation, Guide Dogs, the Smith Family and the Salvation Army.

Fay said the campaign was important in the context of decreased government funding, with charitable organisations now relying on bequests as a vital source of income.

“We’re at the very beginning of what’s going to be the largest intergenerational wealth transfer in human history, and it’s critically important that charities and community organisations see some of the benefits of that wealth transfer that’s taking place,” she said.

But she said it was too early to tell whether the increased wealth transfer would translate into higher rates of bequests.  

“We’re probably not necessarily seeing a growth, but I think there’s an awareness that with the intergenerational wealth transfer that’s going to happen over the next 20 years, it’s more important for trusted advisors and for charities to be able to talk to their donors and stakeholders and clients about what they want their charitable legacy to be,” she said.

“So we’re seeing a greater awareness, but… I think we’re only probably in the early stages of seeing whether or not that awareness is actually translating into benefits for the community.”  

Fay said there were a number of ways to leave a legacy via an estate.

Perpetual released details about a trust client, Lionel and Yvonne Spencer, who left a combined $80 million after Yvonne passed away last year.

“They’re the perfect example of how individuals can approach or how couples can approach leaving legacies for community benefit via their estates,” Fay said.

“Lionel passed away more than a decade ago, and he left Yvonne as the life beneficiary of his estate. When Yvonne passed away Lionel had in place distributions that would then go to six organisations who would receive the bulk of his estate… which was more than $40 million in distributions.

“Yvonne, in her lifetime… established a private ancillary fund. After Lionel passed away she… decided to leave the vast majority of her estate to her private ancillary fund, which has a really significant focus on women’s health and women’s cancers.

“What’s really interesting about their story is they demonstrate that there are different ways to utilise your estate to be a philanthropist. Yvonne had decided to utilise her private ancillary fund to make distributions and Lionel decided to make direct distributions to charity.”