Most of us have watched in horror as bushfires have burned across every state of Australia this summer. Many of us are moved to help those most affected. In this article, we thought we would let you know how you can best provide help. Getting it right can make a huge difference.
Give Cash, not Kind
The best way to provide material aid is to provide cash, not goods. While most of us have some spare ‘stuff’ lying around, and many bushfire-affected people have lost a lot of their own ‘stuff,’ the chances that our stuff is exactly what people need is low. Already, many victims of the bushfires, and their supporters, are reporting that managing actual goods that have been donated is providing a logistical headache.
After all, money was first invented because it was so much more convenient than passing stuff around. It is the best way to move wealth from one place to another. That has never been truer than today, when we transfer cash electronically. The transfer is instant, there are no transport costs and there is no need for storage. Your donation will not go off or perish and will be there ready to use when the recipient really needs it.
The other great thing about giving cash is that recipients of cash donations will tend to spend that cash locally, at least in part. These fires have come right at the height of summer, which for many areas is also the busy time of year for local businesses. This means a double whammy: people have not just lost assets; they have lost income as well. Sending cash into those communities is a way to alleviate the loss of business income and will help the local economy.
If you only have kind…
You may not have any spare cash. If not, then look for a company that specializes in giving material aid, and work through them. As one example, Foodbank works in every state or territory. Their website also says that they prefer if you donate cash – telling us that they can purchase $6 worth of benefits for every $1 they receive. If you really want to give goods, their website has a list of things that they need and a list of locations that you can take those things to. It also has a list of things that they definitely do not need.
If the things you have are not on that ‘things we need’ list, but you still can’t donate cash, then think about volunteering either your time or some other thing. Agency websites will tell you what sort of volunteering might be needed. For example, the RSPCA is using volunteer drivers to move family pets out of harm’s way in various communities.
It might not be your time. Some people are providing a spare room, for example, or spare space in their garage. Once again, have a look at the websites of relief agencies to see if they need any of this kind of volunteering.
Look for a Reputable Agency
Sadly, these are not the first bushfires we have experienced in Australia. The only ‘upside’ of that is that we have developed quite some expertise in providing bushfire relief. There are experienced agencies that are very good at getting aid to the people who most need it as efficiently as possible.
Reputable agencies include:
- The Salvos;
- Red Cross;
- St Vincent de Paul;
- State-based fire services (which are typically run by volunteers).
There are plenty of others, and you may have a personal preference. That’s fine – just do your homework so that you can be sure your money gets where you want it to go!
On a related note, be wary of retail companies that promise to donate a portion of the cost of whatever it is that they sell to a bushfire cause. It might sound harsh, but there can even be an element of profiteering involved when companies do this. For example, a company may announce that 10% of all revenue/profits from sales of a particular item will be given to bushfire relief. This might sound generous – but they are still keeping the 90% that isn’t donated, while only 10% of the money you spend ends up as relief.
And if people are moved to buy more of that product or service, then that company will be keeping 90% of increased sales. In the 10% example, if sales increase by 11% as a result of the program, the company has actually made more profit as a result of its ‘donations.’
Be wary even if the company pledges to donate 100% of the purchase price. If you don’t need whatever the company is selling, then you might as well just give the money directly to a charity and cut out the middleman. Even better – you get to choose the charity.
That said, if you were already going to buy that good or service anyway, then you might as well pick the one that will also put money in the hands of bushfire relief agencies. So there is no single rule.
Think about whether you can claim a tax deduction for your gift. If you can, then you can actually donate more money to that recipient. Let’s say you earn $37 per hour and you want to give $100. If you pay tax at 32.5%, then you need to first earn $148. That will take four hours. The Government then takes $48, leaving you with $100, which you give to the relief agency. So, you work four hours, the Government gets $48 and the relief agency gets $100. You are $100 worse off – because that is all you would have kept anyway.
If the organization to whom you donate is registered for tax, then you can donate $148 to them. The government will then give you a refund of the $48 tax you paid, meaning you have still only given up $100 of purchasing power – but the agency has $148. That’s almost 50% more (even though the tax rate is 32.5%)
Tax deductibility turbo charges the benefits of your donation.
Lastly, remember that the effect of the bushfires will last quite a while. The nature of the news cycle is that it always moves on. One day, these fires will not be on the nightly news. But it will take years for affected communities to properly recover, so it is really important that we do not forget about the people affected.
Why not make an appointment in your own diary to re-visit this issue in a few months’ time? Make a simple note to think about how people might need help in April, or July. Maybe there will be a different need for assistance by then. One thing is for sure – there will still be much to recover.