Plan to change the way we give to charity

A new foundation aims to make giving simpler, writes Rob Stock.

Andrew Barnes, founder of Perpetual Guardian and philanthropist.
Lawrence Smith

Andrew Barnes, founder of Perpetual Guardian and philanthropist.

Perpetual Guardian is hoping to change the way many of us give money to charity, or bequeath it in our wills.

It has created the Perpetual Guardian Foundation designed to make giving simple for everyone and to enable Kiwis to pool funds to make a meaningful difference towards their wishes of feeding the hungry, educating kids, protecting the environment, nourishing the arts, revitalising neighbourhoods, strengthening families or any other causes.

The idea is that the foundation will have a series of "sub-funds" which will each be dedicated to funding activities in specific areas.

The idea is that instead of people setting up stand-alone trusts or foundations, they can do it through a sub-fund.

And each of those sub-funds, which can bear the founders' name, and, it is hoped, become brands in themselves that continue to attract donations from others.

For individuals who wish to establish their own fund dedicated to a cause close their heart, a minimum of $50,000 (no maximum) is needed.

For those with less to contribute, donations can be made either to the Foundation's general fund, or to an already established sub-fund.

The man behind the project, Andrew Barnes, chief executive of Perpetual Guardian, says the idea is to create an efficient structure that in time will replace the current model of a proliferation of individuals trusts and charities, which cost a fortune to run.

In time, Barnes hopes, some of the smaller foundations and trusts that Perpetual Guardian Trust manages will be recreated as sub-funds of the Foundation.

Efficiency has become extremely important with interest rates as low as they are.

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Barnes has personally seeded the general fund with $500,000, saying it was his way of giving back to a country that had been extraordinarily good to him.

"I feel an obligation to give something back to the country that has been so good to me. That applies, or should apply to everybody who has had success in the country," he said.

But he's also seeded the first two of the foundation's sub-funds; one for Hearing House (which is on a mission to enable deaf or hearing-impaired children to listen and speak like their hearing peers), while the other is Barnes' own pet project New Zealand Bomber Command.

NZ Bomber Command aims to help preserve the historical legacy of Bomber Command in New Zealand, and paid for the "missing man" flyover at the funeral of Les Munro earlier this month, the last of the pilots of the famous World War Two Dam busters raid.

Barnes hopes the foundation will provide businesses with an avenue to encourage giving amongst their employees through payroll giving. Perpetual Guardian staff members have been offered the opportunity to contribute to the general fund, with Barnes matching all staff contributions dollar-for-dollar.

Barnes says research shows 94 per cent of people want to see the businesses they work for actively supporting charities, and 72 per cent say it makes them feel more loyal towards their employer.

Getting yourself a gifting plan isn't hard, says Kate Frykberg, chair of Philanthropy New Zealand.

It starts off by working out what causes you want to support, and how much you want to be routinely giving.

There's a lot of choice, with over 26,000 registered charities in New Zealand. Frykberg recommends cutting through that by asking this question: "If you had a magic wand, what would your wish for our nation be?"

Frykberg and her husband, who set up their own charitable foundation after the sale of a business, decided they'd focus their giving on children, and do planned giving locally, nationally and internationally each year.

People's giving choices are often a result of their life experiences. Barnes, for example, supports a charity in Britain which takes surgeons to Sri Lanka to perform operations.

He does it in gratitude for a life-saving surgery performed on one of his children who was born with major arteries transposed, which in a country where surgery was not routinely available would have meant a swift death.

There is no guide to what makes for a reasonable year's donating for an individual, says Frykberg.

When Philanthropy NZ last gauged the generosity of different sectors of society in 2011, when it was around 1.35 per cent of GDP. In October, an update of that research will be published, and Frykberg is hoping to see an improvement.

The 2011 amount was relatively high by international standards, but it may be flattering us a little as the giant community trusts are big givers. Still, Philanthropy NZ found individuals gave nearly $6 in every $10 of philanthropic funding, with trusts and foundations the second biggest source of money for good works, responsible for just over a third.

If you consider your income a bit like your household GDP, you could decide that 1.35 per cent of your income was your chosen amount.

Based on that though, a household earning $100,000 a year would end up giving away a little over $1000 a year, or $20 a week, if they did that from after-tax earnings.

Frykberg reckons many people can do better. "When people ask me, I say five per cent or more of your income is perhaps a rule of thumb."

She recognises that wouldn't be possible for everyone, and points out that giving of time is just as valuable.

Bequeathing funds through wills is big business with over $120million a year donated that way. With house prices as high as they are, there is scope for more people to leave charitable bequests. "I believe it is growing. I think it could grow significantly more. It is such an easy way to give. I can't see why everybody wouldn't include a bequest in their will. It is painless."

Frykberg believes that we need to "normalise" giving by talking about it more, a bit like the Americans. That, she feels, could lift its profile, and make us give more freely.


Planned giving is the idea of giving systematically. It involves having a philanthropic plan, often to give a portion of wealth each year to causes that make a difference to the lives of people less fortunate than yourself.

  1. Direct giving: Dropping a gold coin into a collecting tin, signing up to an annual membership of an organisation, or sponsoring a child, are all common ways of occasional, or regular giving.
  2. Social crowd funding: The rise of sites like Give a Little have enabled individuals to raise money for good causes directly from the public. The sites enable instant fund-raising. Currently, on Give a Little you can help fund the rehabilitation of Demon the dog, who was caught in a house fire, help fund research into the value of New Zealanders' recreational fishing, or help the family of Will Burton, a little boy left brain-damaged by meningitis.
  3. Payroll giving: This scheme is run by the IRD, and allows people to make regular donations to registered charities directly from their salaries. It feels like KiwiSaver for charities, but it is underused.
  4. Bequests: Money bequeathed in wills made up around 8 per cent of personal charitable giving in 2011.
  5. Establish a charitable trust: The preserve of the rich, who name them after themselves. These are costly to run, so they need to be very big.
  6. Giving to a community foundation: Giving a chunk of money, or assets, to an established community foundation, of which there are a number around the country, is an alternative to setting up your own. To find your local one go to:
  7. Discounted or Donated goods, assets or services: This is one way businesses give, but individuals do it too. It could be an accountant giving their time to help a charity do their books, or an individual dropping unwanted furniture off at their local Salvation Army store.
  8. Sponsorship: While this is linked inextricably to businesses, businesses are run and owned by people. About half of sponsorships appear to be sports teams and clubs.
  9. Adding a charity as beneficiary of trust: There are hundreds of thousands of family trusts around New Zealand. Some add a charity as a discretionary beneficiary.

 - Stuff

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