When starting out on your philanthropy journey, there are six areas we encourage our clients to reflect on.
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Wealth Management
I'm new to giving
Why give?
People give for many different reasons. For some, philanthropy is about ‘giving back’, expressing personal or family values, or supporting a cause that has affected them or someone close to them. For others, it may be shaped by faith, culture, a passion for a particular theme or place, or a desire to create a lasting legacy.
Many of our clients feel compelled to take action on challenges such as climate disruption, poverty and inequality, community cohesion or public health. As recognised by the UK government, British charities are facing rising demand for their services, as well as rising costs and often falling income – highlighting the many urgent needs for philanthropy to support.
While philanthropy is naturally focused on the benefit it brings to others, many donors find that it enriches their own lives too, through personal fulfilment, learning and a stronger sense of purpose. Giving can also bring families together around shared values and provide a way to involve the next generation in conversations about wealth, responsibility and impact.
Questions to consider
- What motivates your giving?
- Which causes, communities or issues matter most to you? What would you change, challenge or enhance in the world if you could?
- Could philanthropy help bring your family together around shared values
- What kind of legacy would you like to create?
- Are there life events — such as selling a business, planning succession or writing a will — that are shaping your thinking?
Understanding the charity landscape
Philanthropy plays an important role in supporting civil society — the wide range of charities, social enterprises, voluntary groups, community organisations, cultural institutions, schools, universities, faith groups and campaign networks working for public benefit. These bodies help address social, cultural and environmental challenges, often in areas where government or business alone cannot provide all the answers.
The causes philanthropists can support are hugely varied. They may include education, employability, poverty relief, health, the arts, climate and environmental action, animal welfare, community cohesion, loneliness, disaster relief or support for specific groups such as children, young or older people or refugees.
Many charities and civil society organisations depend on philanthropic funding to develop ideas, deliver services, advocate for change and strengthen communities. Philanthropy can support well-established institutions, but it can also provide flexible funding for grassroots groups, innovation and work that may otherwise struggle to attract support.
With over 170,000 registered charities in England and Wales alone, it can sometimes feel overwhelming at first to know where to start. But the richness and diversity of charitable activity in the UK also means that, whatever your passions and interests, you are likely to find something that resonates with you.
Where should my giving start?
There is no shortage of valuable work that your philanthropy could support, so it is helpful to step back and reflect on your values, interests and passions; the resources you can bring; and the kind of change you hope to achieve. Together, these can help you develop a clearer initial focus for your giving.
You may want to begin by thinking about ‘who, what and where’ are the groups of people, causes or places you care about. Some donors focus locally, perhaps on the community where they live, work or have family roots. Others choose to support national or international work or causes that cut across geographies.
It is also worth considering the resources you can bring beyond money. Philanthropy can include time, expertise, networks, influence and the ability to convene others.
Remember that you don’t need a ‘perfect’ plan to get started. Most donors start by making a small number of gifts and learning from the organisations they support, before developing a more formal strategy.
Some ways to narrow your focus
- A particular geography or community.
- A cause or sector, such as education, health, the arts or the environment.
- A group of people, such as children, young people or older people.
- A style of change, such as direct service delivery, research, advocacy, innovation or systems change.
- Personal passions or interests (such as sport or the arts), experience or expertise.
- A set of values or family priorities.
Finding the right structure for your giving
There is no single structure that works for every donor. You may begin by giving directly to charities, or you may choose to work with others through giving circles, pooled funds or philanthropic networks.
As your giving becomes more strategic or significant in scale, you may decide to use a more formal structure. This is often the case where, for example, a liquidity event provides an opportunity to set aside more substantial sums for charitable giving at a specific moment in time. Options can include establishing a fund through an intermediary, such as a donor-advised fund or community foundation (explained below), or creating your own charitable trust or foundation.
The right structure may depend on several factors, including how involved you want to be, whether you are giving individually or as a family, how long you want your philanthropy to last, the scale of your giving, and any legal or tax considerations. Independent legal and tax advice should be sought where appropriate.
Structures and approaches to consider
- Direct donations to charities.
- Giving circles or pooled funds.
- Funds administered via intermediaries, such as a community foundation (a charity that works with local donors to support projects across a geographical region or regions (city, county or country).
- Donor-advised funds (a giving account which sits under the ‘umbrella’ of an existing charitable organisation).
- Charitable trusts or foundations.
- Lifetime giving and legacy giving.
- Social investment or impact investing, where appropriate.
Putting it into practice
Once you have a clearer focus, the next step is identifying organisations or projects to support. Some donors take a proactive approach, researching organisations, speaking to experts, learning from other funders and visiting projects. Others prefer to invite and respond to requests for support. Many combine both approaches.
When considering a charity, helpful factors to look at include how it articulates its mission and the need for its work, the strength of its leadership and governance, its financial information, and how it tracks and communicates the impact of its activities. For more significant gifts, you may wish to meet the organisation and speak with its leadership or trustees and seek more detailed information about how your support would help.
Building a relationship with an organisation can be more rewarding than making a one-off gift. Productive relationships are built on trust, open communication, mutual respect and realistic expectations about reporting, involvement and impact.
Remember, there's no single 'right way' to give
Philanthropy is personal, and your approach will almost always evolve as you learn. Some donors prefer to be hands-on, while others are more hands-off. Some work independently; others collaborate. Some wish to maintain or scale-up proven organisations and approaches, while others are comfortable funding new or higher-risk ideas.
You may choose to concentrate on relationships with a small number of organisations, or give smaller amounts to a wider group, ‘letting 1000 flowers bloom’. You may prefer to give funding that’s restricted to a specific project, or unrestricted funding that gives charities flexibility to use funds where they are most needed.
‘Impact’ will also mean different things to different donors. For some, it may mean a measurable change in an individual’s life. For others, it may include strengthening a community, influencing government policy, supporting innovation or helping an organisation become more resilient. The important thing is to remain curious, proportionate in your demands of the charities, and open to adapting your approach over time.
When it’s working well, philanthropy can be engaging, exciting and hugely enjoyable!
Find out more
- Contact your Private Banker to find out more about how we can support your philanthropy journey.