Updated 23 October 2026
Wills - Potential Problem #29: Not Considering Charitable Donations
A charitable gift in your will can support a cause, commemorate someone you love and leave a lasting public legacy. If you want a scholarship named after your family, a plaque installed or the donation acknowledged publicly, those expectations need careful planning. A charity cannot be assumed to accept every condition attached to a gift.
In NSW, the starting point is a properly drafted bequest that identifies the recipient, purpose and any essential conditions. Agreeing recognition arrangements with the charity beforehand helps your executor carry out your wishes and reduces the risk of disappointment or an avoidable dispute.
1. Decide what you want your legacy to achieve
Start with the outcome: supporting medical research, preserving cultural heritage, assisting students or funding a local service. Then decide whether the charity should have flexibility to use the money where it is most needed, or whether a particular project is central to your gift.
Check the recipient’s legal name and ABN, rather than relying on a campaign name or familiar trading name. A branch, appeal or scholarship may not be a separate legal entity. The ACNC’s guidance on donating explains how to investigate a charity and its activities. Confirm the correct bequest details directly with the organisation.
Public recognition is optional. Decide whether you want your own name remembered, someone else commemorated or the gift kept anonymous. These are different instructions and should be recorded accurately.
2. Distinguish a request from a binding condition
An expression of hope that a charity will acknowledge your generosity is different from making recognition a condition of receiving the gift. If acknowledgement is essential, a conditional bequest may be appropriate, subject to legal advice and the charity’s willingness to accept the obligations.
Your solicitor should coordinate the will with any formal gift agreement. The documents need to explain whether the charity must accept specified terms before receiving funds, or undertake obligations after payment. A conversation with a fundraiser does not necessarily secure the approvals needed for a binding commitment.
A history of donations does not itself authorise an executor to redirect inheritance to charity. Courts have limited powers to interpret or rectify wills and deal with charitable trusts; they do not simply add a forgotten charitable gift because it would reflect someone’s generous character. Put the intended bequest into the will while you can give instructions.
For example, an arrangement might require the charity to accept a named scholarship and agreed annual acknowledgement before the executor pays the bequest. That needs tailored drafting, including what happens if the charity refuses. A solicitor should also explain whether signing an agreement during your lifetime creates obligations immediately or affects your ability to change the proposed gift.
3. Agree how the charity will acknowledge the donation
Specify the recognition that matters: a named scholarship, a plaque, an annual report entry, a website acknowledgement or an announcement explaining the donation’s purpose. Record the exact name, agreed wording and the person authorised to approve accompanying photographs or family history. Clarify whether the donation’s amount may be published.
Set a realistic duration and timetable, linked where appropriate to receipt of estate funds. A website entry for an agreed period is easier to assess than a promise to promote a donor forever. A charity can commit to publishing an announcement on its own channels, but cannot guarantee independent media coverage or public attention.
Institutional policies matter. Macquarie University’s Naming Recognition Policy, for example, requires written approvals and documented terms. It says naming is not an obligation unless included in a formal gift agreement, and recognises that circumstances may change before a bequest is received. Its policy also provides for withdrawal of recognition in specified circumstances. This illustrates why donors should review the actual agreement rather than assume naming rights are permanent.
4. Provide a workable alternative if plans change
A charity may merge, close or discontinue the project you hoped to support. A building may be demolished or a scholarship renamed. Ask your solicitor to address those possibilities, including a substitute recipient or a closely related charitable purpose.
Where recognition is a condition, the drafting should address acceptance, evidence of compliance, time to remedy a breach and what happens if the condition cannot be met. It should also identify how any obligation can be enforced; family members should not assume they automatically have enforcement rights over a charitable trust.
For an existing charitable trust, a formal cy-près process may sometimes redirect funds to an appropriate charitable purpose. The NSW Government’s charitable trusts guidance explains the application process. This is a legal remedy, not a substitute for workable drafting or a way to create a gift omitted from the will.
5. A real case involving a commemorative award
In Tantau v MacFarlane [2010] NSWSC 224, a will left half the residuary estate to an incorrectly named art gallery to establish an annual Len Fox Award. The intended recipient, the National Gallery of Victoria, initially understood that the money could fund acquisitions. It declined once the annual award requirement became clear.
The Supreme Court corrected the gallery’s name, upheld the gift as charitable and directed the executors to seek a substitute trustee. The case demonstrates the importance of identifying the recipient correctly and checking that it understands and can administer the conditions. It does not establish that every publicity or memorial naming requirement will be enforceable.
6. Match the gift to your estate and family circumstances
A bequest can be a fixed amount, particular property or a percentage of the residue remaining after liabilities and other gifts are dealt with. A percentage can adjust with the estate’s value; a fixed amount may consume a larger share if assets fall or care needs increase.
Check ownership and liquidity before promising an asset or funding a long-running program. Your executor must administer the estate and deal with its obligations before distributing what is available. A charitable bequest also does not remove the possibility of a family provision claim by an eligible person.
Legal Aid NSW’s will guidance outlines charitable gift options and the importance of considering loved ones. Review the proposed gift alongside provision for dependants and any other commitments.
A tightly restricted gift can also require substantial administration. Ask whether the amount is sufficient to sustain the proposed activity and whether simpler recognition would leave more available for the cause. Recognition should acknowledge the donor without giving the family unintended control over the charity’s operational decisions.
7. Separate legacy recognition from tax assumptions
Do not assume that leaving money to charity creates an income tax deduction. Section 30-15(2) of the Income Tax Assessment Act 1997 excludes testamentary gifts from the gift deduction available under that section. Lifetime donations involve different considerations, including the recipient’s deductible gift recipient status; ACNC registration alone does not establish that status.
The ATO’s ruling on gifts distinguishes ordinary public acknowledgement from a material benefit to the donor. Commercial advertising or sponsorship arrangements need separate assessment. A respectful acknowledgement of someone’s generosity is not automatically equivalent to purchasing promotion. Obtain tax advice before linking a gift to business exposure or expecting a particular deduction.
8. Record the agreement and keep the plan current
Give your solicitor the charity’s proposed wording, naming policy and written approvals. Discuss the amount, purpose, recognition and fallback together so that the will and agreement support the same outcome. Avoid leaving your executor to negotiate essential terms after your death.
Review the arrangements when your finances, family circumstances or chosen charity change. Keep the original will secure and tell your executor where to find it, together with the relevant correspondence and gift agreement. A clear record helps distinguish essential conditions from preferences.
CM Lawyers can help you consider charitable gifts within your wider wills and estate planning. Contact our team to discuss a legacy that supports your chosen cause and clearly records any acknowledgement you want the charity to provide.
This article provides general information about NSW estate planning and is not advice on a particular will or charitable gift.
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