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Market Commentary April 2019

18 April 2019 | Admin

Making it big – Philanthropic Giving

Warren Buffet is often praised as one of the most successful investors of our time but perhaps lesser known is his commendable success in the world of philanthropy. He has embarked on an impressive programme of philanthropy during his later years – personally and through the encouragement of others. What is the secret of his success? “Start by focusing on what motivates you” he advises, “then maximising your impact. Focus on charities that are able to sustain themselves and are excellently managed”. This strategic approach to philanthropy has many parallels to his approach to investment and the success has followed.

In the UK, the 46 local Community Foundations we have around the country are experts in strategic giving. They use their expertise, together with their local knowledge of charities big and small, to work with donors to form their own effective strategic giving strategy, an approach that is not dissimilar to that of Buffet.

Giving often focuses on a particular cause the donor feels passionately about and may offer amongst others:
a) Personal development, new experiences, meeting new people and the chance to engage directly with a charity;
b) Be used as a catalyst for change or to have an impact on something that matters to society; and
c) Be designed to bring a family together across generations for a common good.

The government encourages this type of wealth distribution during a donor’s life and in their Estate. Charities can benefit from tax reclaims on Gift Aid donations while further tax relief on donations is available for higher and additional rate taxpayers via self-assessment. A donor is also able to claim tax benefits on share donations depending on their circumstances.

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