Millennials and Gen Z view philanthropy differently and adopt it earlier than older generations, according to Graeme Price, founder trustee at Together Charitable Foundation.
Speaking at the CISI Financial Planning conference in Manchester yesterday (October 15), Price alongside Harbi Jama, director of development and communications at The London Community Foundation discussed how advisers could identify and classify their philanthropic clients.
“Millenials and Gen Z expect to see a focus on philanthropy and they want to know what we are doing in that area as well,” Price explained.
He urged advisers to ask clients a full set of questions, such as: Do you volunteer? What do you want to do in retirement? Are they trustees of any charities or have they included any charities in their wills?
Price also highlighted to delegates to ask clients the full set of questions: “The mistake that we made as a business was we realised that during the annual review we were not asking the full set of questions that related to this area. It was just a summary.”
He broke down the types of philanthropic clients that advisers could have which included tithers, humanists, stewards, oasis, north east-ers, south east-ers and tax savers.
“So tax savers are people who are interested in, is this the best way to secure tax reliefs? It may end up being the only way to receive marginal rate relief depending on the Budget, but in reality, it is people who look to maximise the tax rate they get now, so the impact of their giving in distribution when their tax rate may be lower is higher,” Price added.
He outlined two vehicles advisers could use with their clients to meet their philanthropic needs.
“You are going to want to have your own registered charity if you're going to hold physical assets in it, if you want to give directly to individuals. The cons of having your own charity is speed of registration. The fastest I have heard is six months, it is usually 10 months. There is also establishment costs and lawyers, which could cost £8,000-£10,000 plus VAT and ongoing overseeing costs,” Price explained.
He also discussed how advisers could use a donor advised fund which was fast to set up with the costs being lower which meant clients could increase their impact and there was no trustee liability.
Areas for philanthropic financial planning included wills and deeds of variation, pensions post age 75, removal of excess income, gifting shares to client’s own DAF, sale of investment property and liquidity events.
Jama spoke in more detail about the work The London Community Foundation had done from donations which included support for the Grenfell fire, cost of living crisis and Covid.
Advisers and their clients could have access to grant managers and donor relations managers who provided annual fund statements, regular check-ins as well as allowing people to expand their digital footprint.
