The Joy of Giving

We are currently living through difficult and uncertain times with conflict, discrimination, poverty and the effects of the climate crisis seen or experienced on an almost daily basis.

It is difficult to know what to do when faced with such events and some clients find comfort in donating money or time to causes that are close to their heart.

Charitable Giving

I work with clients who do both; some volunteer their time helping in their local community whilst others regularly donate to their local foodbank or have set up a regular donation to the local hospice that helped a relative during their final weeks.

Other clients regularly support larger charities both in the UK and abroad and many make additional donations at specific times, for example following a natural disaster or in the lead up to Christmas or other religious festival.

For some clients, philanthropy is a fundamental part of their overall value system whether that is from a religious or moral standpoint.

Financial Planning

For those clients looking to make regular charitable donations, we can build this into their financial planning strategy and we include a ‘giving strategy’ within their financial plan. Before doing this we will already have identified how much capital the client needs in order to maintain their lifestyle and taking into account their financial goals.

Typically, clients will ask us to earmark a lump sum from which capital withdrawals and any income generated can be passed across to various charities. In some cases, we are asked to model a giving strategy based on a percentage of their income each month.

Tax Efficiency

Making charitable donations can be particularly tax efficient:

They can attract Gift Aid which benefits the charity but also enables higher and additional rate tax payers to claim tax relief.
Any gifts made to charity are outside your estate for Inheritance Tax purposes and if you gift 10% or more of your estate to charity your Inheritance Tax rate falls from 40% to 36%.
Shares that are gifted to a charity are exempt from Capital Gains Tax.

For significantly wealthy clients, we will often involve other professionals to discuss how best to facilitate their philanthropy, whether that be conducting due diligence on the underlying charities who receive the donations or creating a charitable foundation or Trust.

Future Generations

Some clients like to involve their children or grandchildren in helping to choose what causes to support and where to give money. This helps build a tradition of giving and encourages younger people that they can make a positive impact on the lives of those less fortunate than they are.

For those clients with charitable trusts or foundations, involving future generations enables charitable giving to continue for many years into the future and provides an opportunity for children and grandchildren to become involved in understanding and directing any future investment decisions as well as having a greater say in what charities and causes to support.

Motivation

The decision to give money away as well as the causes to support are both deeply personal and often clients will support causes that are close to their heart and to which they may have a personal or family connection.

There have been a number of studies that look at what motivates people to give money away to charity and the top reasons include:

It helps to make a difference to the causes a person supports.
It benefits society especially those in need or who are vulnerable.
It provides a sense of belonging and makes people feel good.
It sets an example to others; when one person makes a donation, others often follow suit.

Above all, helping others is hard-wired into our DNA as human-beings.

Conclusion

As the world lurches from one crisis to another, it is sometimes difficult to know what to do. A donation of time or money, however big or small, can help strengthen bonds in your local community, can help create a meaningful impact and can make a difference to those truly in need.

Contact Us

If you would like to discuss including a giving strategy within your financial plan, please do contact us.