Many people think of charitable giving as an item in their annual budget, and measure it as a percentage of income. But if you own financial assets such as real estate or a portfolio of stocks and bonds, you should consider an endowment approach to your philanthropy.

Ultra-wealthy philanthropists have long created family foundations, which they fund with a single, large gift. From then on, their charitable giving is done out of the foundation – typically at a rate equal to about 5 per cent of the assets in it. Today, the falling costs of administering a foundation, or the alternative vehicle known as a donor-advised fund, mean that anyone who gives at least $500 a year to charity should consider taking a similar approach.