With Australia set to experience the greatest ever intergenerational transfer of wealth over the next two decades, financial advisers have a key role to play in increasing the charitable giving of Australians.
“Over the coming years, Baby Boomers will be working increasingly closely with their trusted advisers to put estate plans in place, making it important for financial planners to know how to discover and guide their clients’ charitable intentions,” said Caitriona Fay, Perpetual’s National Manager of Philanthropy & Not Profit Services.
This call from Perpetual coincides with Include a Charity Week (7-13 September 2015), a joint initiative of over 100 of Australia’s leading charities aimed at encouraging more Australians to leave a lasting legacy by including a charitable gift in their will.
According to Include a Charity, while 87% of Australians support a charity during their lifetime, only 29% of people say they’d be willing to leave a gift in their will and just 7.5% end up doing so. In this context, the goal of the alliance is to increase the number of people who leave gifts in their wills to 15% by 2020.
The largest ever study into charitable bequests in Australia, co-funded by The Trust Company (part of Perpetual) in 2014, revealed that people who are advised by professionals in the writing of their will are no more likely to include a charitable bequest than those who use a will-kit or simply write their own. (See note 1.)
However, the research also cited a study from the UK which demonstrated that when advisers simply mentioned that leaving a gift to charity was an option, the percentage of clients who did so rose from 5% to 11%. When these will-makers discussed examples of the practices of others and asked if there were any charities that clients were passionate about, those including a charitable bequest rose to 15%. (See note 2.)
“There is clearly an immense opportunity for trusted advisers to positively influence the levels of charitable giving in Australia, but they must know how to raise the issue with clients,” said Ms Fay.
Ms Fay makes the following suggestions to assist advisers to introduce the issue of charitable giving into their conversations around estate planning:
• Ask the question: Are there charities you currently support and would you like to include them in your will?
• Provide an example: Highlight a positive story or example of someone else who has left a bequest.
• Request information: Ask charities to provide information on the best way people can leave a bequest to them and pass this on to clients.
“Helping clients to consider their philanthropic intentions can have significant advantages for advisers, by deepening their client relationships, allowing them to engage with the next generation, differentiating their service offering and increasing client referrals,” said Ms Fay.
Perpetual is trustee for more than 1,100 charitable trusts and endowments and provides individuals and families with advice on establishing charitable foundations and structured giving programs.
Note 1: Baker, C. 2014, Encouraging Charitable Bequests by Australians, Asia-Pacific Centre for Social Investment and Philanthropy, Swinburne University of Technology , p.58.
Note 2: Baker, C. 2014, Encouraging Charitable Bequests by Australians, Asia-Pacific Centre for Social Investment and Philanthropy, Swinburne University of Technology , p.22.
Source: Perpetual
