May 26, 2022

4 Ways to Maximise Your Clients’ Charitable Impact

Author National Philanthropic Trust

We know how much clients rely on their advisors for expert philanthropic advice. Being well-informed about how to generate maximum charitable impact while delivering the most convenient, tax efficient, solutions will help deepen your client relationships.

At NPT UK, we’re happy to pass on our expertise to help you do this. When it comes to generating maximum impact, here are a few key topics to bear in mind.

Values & Beliefs: Philanthropy is personal – often described as a journey, not a final destination. So, think about the driving forces behind your client’s philanthropic decisions. For example, is legacy an interest? What is their vision for the world they want to leave behind? Are they more interested in uniting their family around common goals, or driven by a personal issue or cause? Once you have that initial understanding, you can consider the range of vehicles and solutions available to you.

Giving Vehicles: While there are a range of charitable giving vehicles to consider, often clients will end up deciding between a donor-advised fund (DAF) or a charitable trust, or foundation. For most donors who wish to make grants to charities, a DAF provides a sophisticated and flexible solution without any additional work required to set up and run their own charity. Make sure you understand the benefits of a DAF so that you can successfully help your clients maximise their charitable impact.

Contributing Assets: Donors often turn immediately to cash giving without considering the other options. However, there are other assets that may be more appropriate to your client. Donating appreciated shares is one of the most tax-effective ways your clients can undertake philanthropy. If your client’s donated shares are listed on any stock exchange recognised by HMRC, your clients’ taxable income will also be reduced by the market value of the qualifying shares in the tax year of the donation. NPT UK can also accept more complex gifts such as private equity/hedge fund interests, privately held shares and real assets.

Impact Investing: Is impact investing an attractive option to your client? While this isn’t a new concept, it is certainly growing in popularity. It is the practice of investing for both financial and positive, measurable social or environmental returns. With the ESG agenda becoming increasingly important to investors, this may be an attractive option for your clients. A DAF with NPT UK makes this easy by offering a selection of sustainable investment options. For higher value DAFs, your clients have the option of recommending that DAF assets be managed by a third-party impact investment manager.

Considering these issues will help provide a solid base to create a well-informed charitable giving strategy for your clients.

For further information on how DAFs can help maximise charitable impact for private clients please contact us.

About the Author

John Canady, CEO of National Philanthropic Trust UK, has 25 years of experience working across the business, nonprofit and government sectors. He specializes in creating and managing philanthropic funds for donors and family offices around the world who wish to base their philanthropy from the UK.