17 May 2018
Retired financial adviser, John Grenshaw, is among a growing number of unassuming philanthropists who are quietly demonstrating that philanthropy doesn’t have to be a complicated exercise requiring a billion-dollar bank account.
While there’s a growing body of research confirming that the secret to happiness is helping others, Sydney-based philanthropist John Grenshaw already knows it for a fact. He’s only been active in philanthropy for five years, but the joy it gives him is plain for all to see.
When I first met John, at an event hosted by The Funding Network, his smile was a mile wide, and as our conversation unfolded, his enthusiasm for spreading the joy by getting more people involved in giving was unmissable.
Grenshaw is quick to point out that his own philanthropic giving doesn’t come close to the million-dollar gifts made by some of philanthropy’s biggest names, but he knows that his contributions have helped change lives for the better.
Here Grenshaw shares his early philanthropic experiences, his thoughts about getting more financial advisers to help their clients consider philanthropy, advice to new donors and more.
How did your giving journey begin? Was there a life event or a spark that got you started or had philanthropy been on your radar for some time?
Five years ago, I read an article about philanthropy in a financial planning magazine. At the time I was preparing to sell my equity in a financial planning business and contemplating semi-retirement. The article sparked my interest in philanthropy and opened my eyes to the various structures and opportunities which subsequently enabled me and my family to set up a lasting giving foundation. As I was coming to the end of full-time employment and the completion of the sale of my business, I took the opportunity and the generous income tax concessions to establish a Private Ancillary Fund (PAF).
Structurally there are similarities between a PAF and an SMSF pension account. They both currently enjoy tax-free income and growth. Each structure requires an investment strategy and there are similar requirements for annual distribution of funds. The main difference is that all the funds in the PAF are strictly segregated for giving only to eligible charities.
I decided to establish the PAF myself, using the forms and templates provided by the ATO and found it surprisingly easy to do so. I am also fortunate that my accountant continues to provide the necessary annual audit requirements on a pro bono basis to keep the administrative costs very low.
I get pleasure knowing that ultimately everything the foundation distributes, nearly half of that amount has been generated from funds that would otherwise been paid in personal tax.
Philanthropy was never a high priority throughout my working life. But once my interest was ignited, I realised that giving back could provide a lasting interest or passion in retirement, not only for me, but for my wife, children and grandchildren.
What’s been the most rewarding aspect of philanthropy for you so far?
To meet and join with other like-minded people and leading institutions to make a greater difference, such as through our involvement with The Funding Network (TFN). The satisfaction of being able to leverage a donation with collective giving, to those less fortunate.
Which cause areas are you most interested in supporting?
When we started on this journey we hadn’t developed a particular passion. We have now been exposed to a wide range of charities and we seek out organisations that have a sustainable model and where there is a focus on ‘giving a hand up, rather than a handout’. Some overseas initiatives have appealed in part because of the ability to maximise impact in very poor countries. Our current focus is supporting organisations dealing with domestic violence and allied causes.
You’re a big fan of collective giving, and have been a supporter of The Funding Network for several years. What do you enjoy most about this approach to giving?
We were fortunate to have discovered TFN shortly after it commenced in Australia. We enjoy the experience of attending these events and meeting inspiring and like-minded people. It is a fun night and TFN is a great platform to showcase different sectors and worthy causes, usually small start-up charities in need of extra funding.
A TFN event provides exposure to inspirational people who have the passion to run charities and be able to educate us on the issues and challenges facing different groups in society.
Like most people, I enjoy the glow one feels when giving, but I also seek tangibility, that is, I want to know that our contribution has, or will, make a difference. Charities that pitch and receive funds through TFN are required to provide an impact statement 12 months after receiving donations and these reports satisfy my needs in this area.
If you could bust any myths about philanthropy, what would they be?
I’m not sure if it’s a myth, but philanthropy comes in all shapes and sizes, from individuals, companies, large and small foundations.
You really do not need to be mega wealthy to make a difference.
Through collective giving, a small tax deductible donation combined with others in the room can make an enormous difference. Having experienced collective giving I believe that a person who donates a small amount will get a similar buzz to anyone else in the room regardless of the size of their donation.
Given your background as a financial adviser, what advice would you give to others in the financial planning industry about broaching the topic of philanthropy with clients?
I am a real advocate for structured giving, yet I am really surprised that less than 1,700 private ancillary funds have been established to date.
Australia is a wealthy country with massive transfer of inter-generational wealth and for some, the desire to leave money to charity in their will. For wealthier clients wishing to donate to charity there is a great opportunity for financial advisers to educate these clients to be aware of the structures available for philanthropic purposes and enabling them to enjoy the act of giving whilst they are alive.
There are various options for structured giving including the use of Public Ancillary Funds (PuAF’s) and Private Ancillary Funds. A PAF is not for everyone, but if a financial planner has wealthier clients who have received an inheritance or selling a business, it is a conversation worth having.
My experience is that clients value the conversation and they are often quite oblivious to the opportunities available to them.
What are your top three tips for anyone who’s either just started, or is thinking about getting started in philanthropy?
For a potential donor, I would consider whether I wanted to give on an ad-hoc basis or set up a lasting structure.
Giving is also often non-financial in that many donors give back by donating their time and expertise.
I would encourage them to consider where they felt most passionate and do some research into preferred charities.
Finally, I would consider what tax considerations apply in their situation and structure to provide the best outcome.
When all’s said and done, what do you hope your philanthropy will have helped to achieve?
I hope that it will:
I also know that it feels good and that there’s plenty of fun to be had along the way.
Read the full article in Philanthropy Australia here.