Philanthropy as a Financial Strategy: A Win-Win for Wealth & Impact

Introduction: Philanthropy as a Financial Strategy

Philanthropy is evolving. It’s no longer just about writing a cheque—it’s about strategic, long-term impact. For high-net-worth individuals (HNWIs), giving is increasingly being integrated into their wealth management plans, aligning with financial goals and values.

The CAF High Value Giving Report highlights a significant opportunity: if every UK HNWI donated just 1% of their investable assets, charities would receive an additional £12 billion annually. Yet, many financial advisers, lawyers, and accountants remain unsure how to guide clients in structuring their philanthropy effectively.

With the great wealth transfer set to shift £5.5 trillion between generations by 2050, financial professionals have a critical role to play. By proactively incorporating philanthropy into wealth planning, they can help clients leave a lasting legacy while benefiting from tax efficiencies and wealth preservation strategies.

The Role of Financial Advisers in Giving Smarter

1. Unlocking Philanthropic Potential Through Smart Giving

Modern philanthropy goes far beyond traditional cash donations. Advisers can help clients maximise their impact through:

Structured Giving – Encouraging the use of donor-advised funds (DAFs), charitable trusts, and legacy gifts to ensure donations are both impactful and tax-efficient.
Non-Cash Donations – Many charities now accept property, shares, artwork, and even business interests as donations, offering clients new ways to give while optimising tax relief.
Impact Investing – Clients are increasingly interested in ethical and impact-driven investments, ensuring their wealth aligns with social good while continuing to grow.

2. Tax-Efficient Philanthropy: Making Every Pound Count

Tax planning is a key motivator for philanthropic giving, yet many potential donors are unaware of the financial advantages available. Advisers can guide clients on:

Gift Aid – Currently worth £1.6 billion annually, Gift Aid enables charities to claim an extra 25% on donations at no additional cost to the donor.
Inheritance Tax (IHT) Benefits – Donating 10% or more of an estate can reduce IHT from 40% to 36%, making philanthropy an effective estate planning tool.
Capital Gains Tax (CGT) Relief – Donating shares or property directly to a charity can exempt the donor from CGT, making it a highly efficient way to give.
Business owners who start a company foundation may also benefit from Corporation Tax relief

3. The Importance of Starting the Conversation

Despite the financial and social benefits, philanthropy is often a missed opportunity in financial planning. The report reveals that while 56% of HNWIs consider charitable giving an important part of their lives, only 5% of financial advisers feel confident discussing it.

Key moments to introduce philanthropy into client conversations include:

Inheritance planning – Encouraging clients to think about their legacy and charitable giving as part of estate planning.
Business exits or liquidity events – Structuring philanthropy into major financial windfalls can help manage tax liabilities.
Family wealth discussions – Engaging the next generation in charitable giving can ensure family values are carried forward.

Partnering with GivingWorks to Build and Manage a Charitable Foundation

For philanthropists looking to create a long-term impact, GivingWorks provides a comprehensive solution for setting up and managing a charitable foundation.

GivingWorks offers expert guidance and administrative support, allowing donors to focus on their philanthropic vision while ensuring compliance and effective grantmaking. Through donor-advised funds, family trusts, and bespoke giving structures, GivingWorks enables philanthropists to maximise their charitable contributions in a way that aligns with their financial and social objectives.

By integrating philanthropy into wealth planning, financial advisers, lawyers, and accountants can help clients establish and manage a charitable foundation seamlessly - ensuring their generosity translates into lasting, meaningful change.