ABN Amro Craigs - Wellington Central

Opinion pieces like this are usually aimed at helping people get more out of their capital or do a better job at hanging onto it.

That’s the focus for most of us. We want to grow our wealth by making sensible decisions and ensure we avoid the money pitfalls.

However, there’s another group who are in the opposite situation. They’ve worked hard, invested wisely and taken a few calculated risks. Having done well for themselves, they want to give something back to their communities.

For those who want to do good in a strategic and long-lasting way, the Community Foundation model is worth a look.

Community Foundations are local, independent and not-for-profit. There are 17 across New Zealand and the network is growing.

They run a model of philanthropy that is still relatively youthful in New Zealand, although the concept has existed for over 100 years elsewhere, notably Canada and the US.

Community Foundations all have their own management teams, are governed by local volunteer Boards of Trustees, and engage professional investment managers to put their funds to work.

People can donate at any time during their life, but many choose to leave a gift in their will, often as a percentage of their estate.

That money is invested, with a portion of the return (often just the income from the portfolio) distributed each year as a grant. The balance remains in place, to keep growing (and generating income) in perpetuity.

Rather than simply giving a lump sum of money to charity, donors essentially create an endowment fund that will deliver a reliable, long-term income stream to those in need, forever.

The very first personal endowment fund in the Community Foundations network came from Edna Brown in 2003, via the Acorn Foundation in the Western Bay of Plenty.

Acorn was in its infancy at the time, although 19 years later it holds $57 million and has given away over $2m to almost 200 various local groups in the past year alone.

Edna, originally from Rotorua, could've given her $67,200 to one of many worthy causes, but her estate gifted it to Acorn in her name instead.

By 2021, the Edna Brown Endowment Fund had distributed grants of $67,922, more than the original donation. The original money was still there too, having grown to $97,913, ensuring many more years of generosity ahead. It’s a fantastic concept.

Another important aspect of the model is that donors can choose how their donation is used in the future. This allows them to ensure funding goes to specific charities and organisations they believe are important, or where they have a passion.

Edna chose to support medical research and treatment causes in the Western Bay of Plenty.

There are many organisations that deserve our collective support across our local communities in New Zealand.

For those lucky enough to be in a position to help, Community Foundations offer a great way to direct donations to those who need them.

They allow funds to be pooled into one structure, to create economies of scale and deliver sustainable, growing income streams that will keep on giving well into the future.