Philanthropy can be a very satisfying constituent of any wealth planning conversation, yet it remains as an often-overlooked component. Most financial advisors do not include it as part of their KYC (know your client) discussions, this is despite the fact that it is a topic that most clients love to discuss whether as a donor, trustee, school governor or volunteer. Philanthropy is not just about giving money; it often includes time, and when done well, it requires time.
It was Aristotle who said: “To give away money is an easy matter and in any man’s power. But to decide to whom to give it, and how large, and when, and for what purpose and how is neither in every man’s power nor an easy matter”.
On the surface, giving seems simple. Whilst it clearly brings joy to others, as well as the giver, for it to be truly impactful, thoughtful planning is essential. Most clients are familiar with the notion of gift aid, but fewer understand the significant tax advantages of donating shares, property, or incorporating philanthropy into broader inheritance tax planning. And that’s where good advice matters.
There are countless advisers, intermediaries, and institutions vying for a donor’s attention however, not all of them are aligned with the client’s best interests. For example, many private bankers avoid raising the subject of philanthropy altogether, concerned that clients giving money away may reduce their assets under management. As a result, donors are often left without the guidance they need to navigate the complexities of charitable giving.
There is a lot to consider when it comes to philanthropy. Many donors are unaware of the various options available when it comes to structuring their giving from Charitable Incorporated Organisations (CIOs) to Donor-Advised Funds (DAFs) as well as what type of charities to consider. Should donations be restricted or unrestricted for different projects? What is the appropriate timescale for the donor? How can the donor maximise returns on any philanthropic capital? Should they consider appointing an investment manager and how to go about searching for one? Who will help develop an Investment Policy Statement aligned with both ethical preferences and the charity’s objectives? If trustees are needed, from where are they sourced, what are their responsibilities, and who will train them?
These are all very complex questions, but with the right guidance, they become manageable. That’s why it makes sense to seek help from someone who not only understands the integral role philanthropy plays in wealth planning, but who is also truly independent. Even more powerful is working with someone who has firsthand experience as a trustee or volunteer, someone who understands the language, priorities, and constraints of the charitable sector. This empathy bridges the gap between giver and recipient, allowing individuals, families, and businesses to enjoy their giving journey with clarity and confidence.
If you or someone you know is structuring a new charitable foundation, refining an existing plan or would simply like some initial direction on their philanthropic actions, Rupert Cecil is an excellent point of contact to help bring clarity and confidence to the process.
Check out Rupert’s full profile HERE