Once professional advisers speak to high-net-worth clients about using a proportion of their wealth to support charitable causes, what’s next in assisting these aspiring philanthropists to give well?
Philanthropic funding is vital for the charitable sector, but it can be a greater challenge than first anticipated for high-net-worth clients to find the right organisations to support. Philanthropy is an increasingly integral part of a client’s long-term strategic financial planning goals, and as with any other area, advisers need a network of sector experts to navigate the philanthropy ecosystem and ultimately help their clients.
A philanthropy report from Pro Bono Economics dated November 2023 states, “There is a philanthropy knowledge gulf in the UK’s financial sector, which is preventing financial advisers from engaging their clients on philanthropy despite a clear and growing demand for philanthropy services. As a result, clients are missing out on key products, services and advice which would allow them to meet their ambitions of having a positive impact with their money.” The report, written by Nicole Sykes continues, “By failing to offer philanthropy services, firms too are missing out on valuable opportunities to build relationships with their clients and their clients’ families, and so are failing to grasp the financial benefits which can follow.”
Many professional advisers are partnering closely with their local Community Foundation on behalf of their clients who wish to support local communities. The key role of a Community Foundation is that it connects financial planning to local needs, providing specialist philanthropy support and knowledge that makes a difference to the community. And there is no shortage of support with a UK network of forty-seven accredited Community Foundations who find, fund, and support some of the smallest voluntary organisations in the country via funding from philanthropists and businesses. These professional grant-makers have the experience to find the causes that best support some of the most pressing needs of local communities in their respective locations.
Furthermore, Community Foundations take care of all the hard work associated with giving well, to ensure that high-net-worth clients can give with confidence and fully experience the joy it brings without the administrative headaches and costs that come with creating their own foundation or trust. Setting up a charitable fund doesn’t need to be complicated. The network of Community Foundations take care of the necessary obligations for your client, relieving the pressures of regulation from the Charity Commission as well as the due diligence needed to vet charitable organisations to support and monitor impact.
Josephine McCartney, Chief Executive, Kent Community Foundation said, “One of the first issues that often stops people donating to charitable causes is knowing how and where to start. Giving away money well is hard. Our job at Community Foundations is to make giving easy and enjoyable for your clients by assisting them to set up an endowment or flow-through fund which can be passed on to the next generation. We currently work with over ninety philanthropic funds in Kent and use our expertise to award millions to good causes on their behalf.”
Community Foundations collectively cover every postcode in the UK and together distributed over £170.6 million to charities and voluntary organisations in the financial year 2022-2023. They have philanthropy experts that work closely with financial advisers, wealth managers, accountants and solicitors , providing unbiased professional advice on personal giving journeys. They are a vital asset in bridging the ‘philanthropy knowledge gulf’. Over £811 million is being managed by the Community Foundation network in community-focused endowments, being invested by communities for communities. This has risen by 14% since 2020, showing a drive for more sustainable support at a local level.
The Pro Bono Economics report about philanthropy concluded, “The UK could build on its success as a world-leader in asset management by becoming a world-leader in philanthropy services; getting ahead of the competition striving to attract the next generation of wealth by offering trusted, genuine, impactful new ways to make a difference; and in the process it could generate hundreds of millions of pounds for good causes much in need of an influx of cash.”
To find your local Community Foundation visit www.ukcommunityfoundations.org/our-network
Source material –
A report from Pro Bono Economics dated November 2023 explains; The need to overcome the philanthropy knowledge gulf and recommended close partnership working between the regulator, the financial sector, philanthropy specialists and the accredited bodies.
UK Community Foundations (UKCF), one of the UK’s largest funding networks, has published its annual report, Philanthropy 2023. It highlights the determination of UK communities to overcome the financial crisis and address the root causes of social inequity through local philanthropic action.
www.ukcommunityfoundations.org/our-impact
Just 5% of independent financial advisers (IFAs), wealth managers and planners said they are “very confident” about advising clients on philanthropy and half of all surveyed said this was due to a lack of training in the profession.
Research by the Charities Aid Foundation (CAF) with 215 professionals in the industry found that almost three-quarters (72%) do not include philanthropy as part of their initial fact find with clients, despite 21% saying they see a direct link between providing philanthropic advice and winning new business.
About Kent Community Foundation
Grant-maker Kent Community Foundation has been finding, funding, and supporting some of the smallest voluntary organisations in the county for over twenty one years. In this time, it has distributed almost £55 million to support thousands of small charities and deserving causes where a modest sum of money can make a significant impact.
They are part of a UK wide accredited network of forty-seven Community Foundations who are committed to improving the lives of local people and communities, particularly the most vulnerable, isolated, and disadvantaged by matching those who want to help, with those who need the help.
Responsible for more than ninety philanthropic funds, Kent Community Foundation is unrivalled in its knowledge of local causes and assists individuals, families, and businesses, who want to help, to establish and administer their own charitable funds.
