Donor rebate adds gloss to giving

When Russell Williams turned 74 in March, he didn't look forward to receiving presents himself. Instead he chose to give away a chunk of his wealth.

The former Auckland accountant, now retired in Tauranga, has become the first regular donor to the Tauranga-based Acorn Foundation to take advantage of a new tax refund that pays him back a third of what he gives.

He plans to make the donation every March, partly because it's his birthday - but also because from April this year donors can now claim back from the tax department 33 per cent of whatever they gave to charities in the year to March 31.

The department promises to pay the refund within eight weeks by direct credit to donors' bank accounts.

"March is the best month to give it away. You give it away in March and put in the forms in April to get it back," Mr Williams said.

Wellington's wealthy Todd family has also responded to the refund by boosting their donations to their charitable Todd Foundation by almost 50 per cent, knowing that for every $150 they give they can now claim back $50.

"It has enabled us to continue to increase our grant budget at a time when the investment income has been reduced," said foundation executive director Kate Frykberg.

On a smaller scale, Acorn Foundation executive officer Nicky Wilkins told a recent seminar that her father-in-law had decided to fund two chairs in a new school auditorium at $100 each for his two grandchildren, but upped it to three when he heard about the refund.

Philanthropy New Zealand director Robyn Scott said: "It's starting to feel to some of us that maybe we are starting to move into a new age.

"There seems to be an increased awareness of the needs of others at this time. We are hearing really good stories about random acts of kindness - meals left on doorsteps of people who have been made redundant."

Mr Williams, a founder of the Auckland Marine Rescue Centre and a long-time treasurer of another charity, said he gave money away "almost for selfish reasons - you get a lot of pleasure from doing it".

He chose the Acorn Foundation, New Zealand's first community foundation set up in 2003 to support local causes in the Western Bay of Plenty.

"People will give to St John's and the Cancer Society and the well-known ones such as the SPCA, but there are an awful lot of organisations in the community that are not well known yet do a wonderful job. So that's why I thought Acorn is for me."

He has become an evangelist for the refund, running three "clinics" about it so far at his local Anglican church.

But he said most people did not know about the refund, or that the only way to claim it was to get a special form from the Inland Revenue Department website, an IR526.

"Once you send one in, you'll find that next year you'll get one from IRD. But the problem is that people who perhaps were prepared to give don't know how to go about it."

Ms Scott said at least a mention of the refund should appear on the standard IR3 individual tax-return form.

But an Inland Revenue spokeswoman said a separate form for donations had been adopted in 2001 when the tax system was simplified so most people no longer had to file tax returns.

"A key advantage is that the taxpayer is able to file the donation claim form immediately after April 1 each year," she said.

Fundraising Institute chief executive James Austin said Inland Revenue would need to review all its forms soon because of plans to introduce "payroll giving", under which employees can make donations out of their regular pay packets with the rebate built in.

A bill providing for this was introduced by the Labour Government before the election and is due back in Parliament from the finance and expenditure committee next week.

* Donations refund

33.33 per cent of money donated can now be claimed back as a tax refund.

Donations can be up to the donor's full annual income.

Donations can be made to approved charities, religious organisations, state and integrated schools, kindergartens, universities, medical research and overseas aid agencies.

An IR526 form is needed to claim the refund.Donor rebate adds gloss to giving