The Gift Trust
If you want to give to charity, there are a few pieces of best practice advice to follow:
Be proactive and have a plan for your charitable giving that fits with your values- don’t just give because someone asks you to.
Do your research – look into the charities annual accounts, search on the Charities Services database, ask the charity questions.
Focus on making larger donations to a smaller number of charities rather than funding lots of charities at a smaller amount – this has a bigger impact. If you can commit to multi-year gifts then that helps the charities to plan.
Here’s the problem: there are more than 27,000 charities in New Zealand. On one hand, this is great - it shows that lots of Kiwis have great intentions, and are working hard to give back to their communities. On the other hand, this can create a problem for potential donors: if you want to give money to charity, how do you find the right one among the 27,000 options?
This is the problem that The Gift Trust is working to solve. The Gift Trust is a fusion of wealth management services and charitable giving. If you have some money you would like to see go to a good place, you can open an account with The Gift Trust. From here, you can either nominate specific charities, or work with an advisor to put together an overall strategy.
This reflects the fact that for many people, the specific organisation is often not that important. Rather, when we give to charity, we are looking to get a certain outcome, depending on our values. The Gift Trust helps you put your money towards a charity or group of charities that deliver the outcome you want. They’ve teamed up with financial services firm Consilium to offer their clients high-quality investment advice about creating the most impact when they give to charity.
There’s also a significant efficiency gain here. For the donor, there’s the basic matter of receipts: if you’re going to donate to multiple charities, that’s multiple receipts to deal with every year. When you give to The Gift Trust, you get one receipt. Easy.
This approach also helps make your charitable dollars go further, by setting up long-term relationships with specific charities, rather than a “scattershot” approach to lots of different charities. This reduces the fixed costs of taking and distributing your money, and ensures that more of your money goes to the causes that matter to you.
The endowment model
Opening an account with The Gift Trust can be similar to opening an account with a bank or a KiwiSaver provider. You can create an account, and nominate that the interest goes towards your preferred charity - or just spend the money until it’s gone. Or if you have a large sum to donate, you could choose to have your charitable funds invested by one of The Gift Trust’s partner financial adviser firms, who also offer socially responsible investments. This gives you a better return than a bank account would, which helps make your donation go further.
The Gift Trust has been operating for 9 years now, but they’ve just entered a growth phase. So keep an eye out - this isn’t the last you’ve seen of The Gift Trust.