The Money Is No Longer Yours

I came to philanthropy as a believer. Not naively. I had worked in law long enough to understand that money rarely moves without complexity, but I believed - and still do - that the deliberate transfer of private wealth toward public good is one of the more remarkable things a person can choose to do. It is voluntary. It is, at its best, an act of imagination about a future the donor may not live to see.

What I did not fully understand, in those early years, was how easily the machinery surrounding generosity can shape it, slow it down, and sometimes narrow its ambition.

I spent over a decade working in Australian philanthropy, advising donors and families, and helping them think through what they wanted their giving to mean. It was a privileged vantage point. I saw what worked, what did not, and what almost no one was willing to say out loud.

The families I worked with were, almost without exception, motivated by something genuine: a desire to leave the world in better shape than they found it. What I am more interested in examining is the system that surrounds them - the structures, the incentives, and the habits of thought that too often limit what generosity can achieve.

The man who gave after he died

The donor I want to begin with - I will call him John - came to philanthropy late. He had built a business over forty years, sold it, and then spent the next decade wondering what to do with the proceeds. He was not interested in naming a building. He was interested in problems.

Before he died, John established subfunds in an ancillary fund. What distinguished his approach was a single structural decision: he gave the trustees genuine discretion to deploy capital, not just distribute income. If a new opportunity emerged, the capital could move to meet it.

John's fund was, in the Australian philanthropy landscape, unusual. Many giving funds distribute the minimum required percentage of net assets each year, hold the rest as investment capital, and replicate this pattern indefinitely. The fund grows. The annual distribution grows slowly with it. The community receives five cents in every dollar, while ninety-five cents remains committed, in perpetuity, to the goal of change that never quite arrives.

Minimum distribution rules matter because they express a public policy compromise: charitable capital can be invested for the future, but it cannot be indefinitely warehoused. The risk is that a legal minimum begins to do more than set the floor. It starts to define the ambition.

The money that is still theirs

One of the more instructive tensions I observed - rarely named directly but present in almost every conversation - was between the legal reality of a philanthropic fund and the psychological reality of its donor.

When a gift is made to a giving fund, the money is no longer the donor's. This is not a technicality. It is the legal and moral basis of the tax concession that made the gift attractive in the first place. The capital belongs to the community, held in trust, governed by a trustee, subject to the requirements of the Australian Charities and Not-for-profits Commission.

And yet, in practice, most donors do not experience it this way. They experience it as deferred generosity: their money, parked somewhere more virtuous, waiting for them to decide what to do with it.

Wealth accumulation rewards patience and control. Genuine generosity requires something closer to surrender.

What I observed was that very few people in the ecosystem around the donor were willing to name this tension. The language of philanthropy - impact, joy, stewardship - tends to be soothing rather than challenging. Everyone is congratulated for doing good, and the difficult question of whether they are doing enough, or doing it in the most meaningful way, largely goes unasked.

The default rarely revisited

One of the features of structured giving is how easily a default can become a philosophy. A vehicle is established, a minimum annual distribution is met, capital is preserved, and the pattern begins to repeat itself. Over time, what started as a legal framework can come to feel like a settled strategy.

Is this structure still serving the purpose for which it was created? Is the pace of distribution still right? Is perpetuity the goal, or has it simply become the habit?

Compliance should not be mistaken for strategy, and continuity should not be mistaken for intention.

Who is in the room

Australian philanthropy is concentrated among a relatively small group of families, skewed toward particular industries and particular cities, and organised largely around relationships and social proximity. Charities that receive funding tend to be the ones whose leadership already knows the donors. Newer organisations, community-led initiatives, and work happening outside the major capital cities compete at a structural disadvantage.

The communities most affected by the problems philanthropy seeks to address are rarely in the room when decisions are made.

One of the most encouraging structural developments in recent years has been the emergence of Community Foundation trusts as a recognised category. These are not donor-advised funds administered at arm's length from the communities they serve. They are, at their best, institutions embedded in place, governed by people who live and work there, and accountable to the communities whose needs they exist to address.

What I would say to a family sitting across the table

The legal reality of a charitable fund is worth internalising, not just acknowledging. The money is no longer yours. That is not a loss. It is the point. The sooner that shift happens psychologically, the more freely and effectively the capital will move.

The minimum distribution requirement is a floor, not a strategy. If you are distributing the minimum because that is what is required, spend some time asking why you are not distributing more - and whether the reasons you give yourself are strategic or psychological.

Choose advisers who will challenge you, not just support you. The most valuable thing an adviser can do is ask the question you have not thought to ask, push back on the safe choice, and ask whether what you are doing is more about comfort than impact.

Listen to the people closest to the problem you are trying to address. Not as a courtesy, but as a primary input into how you design and assess your giving.

And finally: accept that you are unlikely to know, with any certainty, whether your giving worked. Some of the most important philanthropic investments produce outcomes that are invisible to the investor. That is not failure. That is the nature of work that genuinely tries to shift things.

Rachael Rofe is an estate planning lawyer and wealth transfer specialist, and a former head of one of Australia's largest philanthropic foundations.