How to be a…philanthropist
Philanthropy enables donors to make a difference in an area of special interest to them by supporting an organisation whose aim is to address a particular issue. As part of a broader wealth management strategy, it can help develop self-esteem and create a rewarding role in the community.
1. Establish your own foundation
Setting up a foundation is the preferred route if you want to become heavily involved in a certain field. However, this can take up a great deal of time as well as finance so it’s important to thoroughly research the issues you propose to address and ensure you can devote the necessary time.
2. Widen your options with community foundations
You can also give philanthropically through organisations such as the Community Foundation for Lancashire, which is tailor-made for people looking for a less hands-on approach. The organisation is part of the national movement of community foundations and acts as a hub for philanthropic giving, with donors setting out criteria for how they want their money to be used.
3. Focus resources where they are needed through tax-efficient giving
Consider how best you can support deserving organisations in a tax efficient manner. Being an effective donor means making informed decisions that maximise tax advantages for both yourself and the organisation you are supporting. Professional advisors can help you to maximise income tax and capital gains tax relief, inheritance tax exemptions, Gift Aid and other tax advantages.
4. Understand the people you are helping
It is important to establish a suitable financial structure for your philanthropic activities. Again, advisors can assist you to fully understand the organisation you are supporting. This means you can be confident that your giving generates the highest possible value for the organisation’s causes and beneficiaries.
Written by Graham Gordon, partner and head of financial planning and wealth management