Donations can benefit the charities and you

GIVING to good causes can make a huge difference to many worldwide. But are you sure you know who you are supporting and if you’re benefiting as well?

Pic shows: Chaum Sreypar in class at at Kampong Pang School. Oxfam have been building new schools in remote areas with minimal access to services, including Kampong Pang School. Facilities built include a water tank, the school building, latrines/toilets and the teachers house with solar power. Picture: Oxfam Australia

CHARITY begins in June for many Australians as they think about spreading some generosity and snapping up a tax deduction before the financial year ends.

Almost two-thirds of Aussie taxpayers do not claim tax deductions for donations, according to the latest Australian Taxation Office figures, but of those 4.5 million donors who do claim do so to the tune of about $2.3 billion a year.

If you’re thinking about sharing some love with those less fortunate, there are ways to make sure you are benefiting both charities and yourself.

GET INVOLVED

Wealth management group Koda Capital’s partner and head of philanthropy, David Knowles, says people should give in a way that gives them a sense they are making a difference.

“Follow what is happening with your money, involve your friends and family in your giving, and look beyond stories to find well-run charities that can show the impact they are having with your money,” he says.

However, getting involved does not mean demanding where your money goes once you’ve donated it.

Let the people running the charity decide how the money should be spent because they know what the highest need is, says Knowles.

“Some people want to put conditions on it and don’t want their money to go towards administration and salaries — but the administration or salaries might underpin everything the charity does.”

Getting involved in a charity does not mean demanding where your money goes once you’ve donated it - leave that to the experts. Picture: Oxfam Australia

CHECK IT’S LEGIT

Charity scams are rare but are out there, so it pays to do your homework.

Knowles says you can research charities on the government’s Australian Charities and Not-for-Profits Commission website acnc.gov.au.

You also can check that if it’s a deductible gift recipient — which means your donations over $2 are tax deductible — on the government’s abn.business.gov.au site.

Oxfam’s director of public engagement, Pam Anders, says you should check that a charity is transparent, and should understand the projects in which they invest your money.

“In this day and age you have so much information at your fingertips and should be able to do your own research about how transparent an organisation is,” she says.

LOOK BEYOND JUNE

Anders says June is the busiest time of the year for many charities, which often run appeals to tap into people’s end-of-financial-year planning.

“Many people are reflecting on how well their year’s gone and if they can afford to give a bit more, particularly as a means of legally reducing their taxable income,” she says.

Donations can deliver a bigger bang if you spread them out over the year, perhaps with direct debits from a bank or credit card account.

Small donations every month will add up to a sizeable tax deduction in July, and are easy to set up online or over the phone.

“At some workplaces you can have payroll giving and can make your donations before tax,” Anders says.

Another way is to leave a bequest — even just 1 per cent of the assets in your will may be “the most important donation you can make”, she says.

Knowles says making regular, predictable donations is a great help for charities. “The ability to predict income is really useful to the charity with forward planning and making commitments,” he says.