Have questions? We have the answers. Frequently asked questions about our philanthropy services.
How much can I afford to give away?
This is one of the key questions for any philanthropist. Before we provide any advice in this area, we ensure we have a detailed and holistic view of your finances. We also talk through your future plans in detail so we can begin to assess the capital requirements to fund your lifestyle. We typically employ ‘financial forecasting’ to run a series of scenarios to provide you with confidence that your lifestyle is affordable whatever the future brings. Once we have this, we can assess your ‘excess capital’ and discuss with you how much, if any, you would like to give to charitable causes or for other philanthropic activities.
How do I choose which projects to support?
This is a very difficult question. Many philanthropists have a particular area of interest which the are considering providing funding for. This may be because of a personal connection or a long-standing affiliation. Many philanthropists decide to split their funding between a number of different organisations and projects. Our advisers are on hand to discuss you options and put you in touch with charity experts who can help guide you further.
Which of my investments or savings policies should I use to give to charity?
Before you embark on any philanthropic activities, it is important to make sure you use the correct savings and investments. Many donors transfer assets (rather than encashing) direct to the recipients. Whatever the means of transferring funds, it is typically advised that you use investments in the least tax-advantaged position to donate to ensure your personal tax position remains optimal. We can provide advice on how you should best use your assets for your philanthropic work.
Can i set up my own charitable foundation?
A charitable trust or foundation is a legal organisation that can be set up by anyone who has decided that they want to set aside some of their assets or income for charitable causes and philanthropic projects. Charities can also be formed as companies or unincorporated associations. Setting up a charitable foundation is a significant commitment and should not be undertaken lightly. We can help you decide whether this option would be best for you given your current situation and philanthropic objectives.
How does giving money affect my own tax position?
Generally, giving more to charity and other philanthropic endeavors will reduce your own tax position. It is usual to gift your least tax-efficient assets and important to ensure all paperwork is completed correctly to secure the best possible tax treatment for your existing capital. Gifting assets will also reduce the value of your estate and therefore is likely to reduce your Inheritance Tax liability on death. Tax planning around philanthropy can be a complex area so our expert financial planners are on hand to help you make the best possible decisions about your money to ensure the optimal outcome for you and your chosen beneficiary charities and projects.
What is a Donor Advised Fund and should I use one?
Donor Advised Funds (DAFs) are essentially savings accounts that enable people to give money or other assets such as shares to their chosen charities without the high entry levels, expense and administrative burden of setting up their own charitable foundations. Anyone who want to support one charity or project through ad-hoc donations would typically be better off donating directly to that organisation, but those who want to support several charities or projects a year, perhaps with regular donations, might find DAFs the better option. One of the key attractions of DAFs is they give the donor complete control over their donations. They also enable the donor to see the impact of their donations during their lifetime as opposed to deferred giving by leaving charitable donations in a will. DAFs are tax-efficient in that gift aid can be claimed to the benefit of the charities and projects receiving the donations while many donors can claim relief against high-rate tax on cash contributions or shares pregnant with gain. We can provide full advice on whether you should set up a DAF given your particular circumstances and philanthropic requirements.
Can you answer another question that isn't listed here?
Certainly. First, you might want to check out the other FAQ pages to see if your question has been answered already. If not, please contact us or use the ‘live chat’ at the bottom right of every page. We’d love to answer any questions you have about NorthStar and how we can help you achieve your financial goals.