12 Aug 2020
Why do you give?
By James Goodman
It’s ironic isn’t it? We put a great deal of effort towards making money, into earning it, growing it, and protecting it. Then, sometimes we go ahead and just give some of it away with no tangible benefit in return. Why is that? Why do we give?
Most Australians give money for a charitable purpose. Some give a little, some give a lot. Some give to those people directly in their communities. Many give to registered charities.
At Goodman Private Wealth we help people work out what they want to do with their money and what their most important goals are. The goals we talk about with our clients aren’t our goals, so it wouldn’t be right to advocate philanthropy as their goal, any more than we would advocate the sort of car they should buy or how much to spend on a holiday.
Our clear role is to make sure the people and couples we work with are clear about their own goals. If that involves giving, then we have plenty of experience in advising how to get the most out of those gifts.
Reasons for giving
I’ve been in and around philanthropy circles for the past 15 years or so, as well as watching at close distance how our clients go about their giving. From that experience, here is my summary of the key reasons for giving and philanthropy.
Benefiting the community
It’s fair to say that all donations are made with good intention – a desire to help the community in some manner. When you drill down, it means a desire to help individuals – to help others. Probably, a desire to help others is innate. All philanthropy has this element at its core.
Touched by a cause
Many times, the motivation to give comes from feeling and experiencing the pain caused by a trauma or illness. You can probably think of someone in your life who’s taken up a cause for reasons such as the death of a loved one, personal illness, or seeing up close someone in the community crying out for a helping hand.
For the person who’s asking
Many donations are made because of a personal connection. Think of the last time you donated. Was it more about the charity or the person who asked you to join their endeavour? Was it a person who you wanted to support? This is the reason giving platforms like gofundme and everydayhero have been so successful.
Recognition
You’ll notice in the pages of some not-for-profit magazines a specific nod to those who’ve made donations, particularly larger donations. However, recognition can take many forms, from a heartfelt ‘thank you’ to your name on the side of a building. One famous Australian philanthropist talks about ‘seeking significance’ – which can be about recognition and also about wanting to do something significant and fulfilling with one’s life.
Being a role model
Instilling family values, inspiring others to do the same, and demonstrating commitment to a cause, these are all ways where parting with money is motivated by the idea of leading others to think or act in a certain manner. A good example is the few families I know who formally sit down with more than one generation to decide together who in the community needs their support in that year.
Tax
Not all charities have tax deduction status, but there are plenty of people who do not give unless there’s a deduction involved. That is particularly true for philanthropists at the larger end of the dollar spectrum. A tax deduction essentially means part of your donation is paid by the Commonwealth Government. For example – a donation of $1,000 to the Salvos comes with a refund from the Government of between $0 and $470, via your tax return.
Some final thoughts
There are more reasons than listed here that form part of someone’s decision to be philanthropic. And indeed, there is never merely one reason behind a decision to be philanthropic.
Universally, philanthropists have good intent, provide benefit to those less fortunate, and have a positive impact beyond the giving itself, no matter their reasons.
If you would like to understand more about philanthropy or would like to talk to us about how we can help you get the most from your giving please contact us.