Six Ways To Use Your Money For Good

There are multiple ways to make a positive social impact with your money. Here are six of the most common that you may wish to consider, that your Finura financial planner can help you to implement.

CHARITABLE FOUNDATIONS

Trusts and foundations are usually created via a single primary donation. They are registered with the Charity Commission and require legal structures and constitutions that dictate how they are run.

A private foundation gives you complete control over granting and investment decisions. It can be funded with and continue to hold any kind of asset, including private equity, tangible assets, real estate, and intangible personal property.

DONOR ADVISED FUNDS

A donor advised fund is an alternative to a charitable foundation. Instead of registering with the Charity Commission, you can set up a fund such as a Charitable Trust with a DAF provider like CAF.

DAFs offer several advantages over charitable foundations, namely cost savings, tax-efficiency, flexibility, and ease of administrative, fiduciary, and reporting requirements.

While your donations are irrevocable and become the assets of the DAF provider, you advise on where you’d like the money to go. The due diligence sits with the DAF provider, or their delegated authorities, who then make the grant on your behalf.

DONOR ADVISED GIFT

A donor advised gift is a giving vehicle that lets you give occasional, large gifts to charity. It’s designed for one-off giving and allows the flexibility to give whenever your financial circumstances and tax affairs dictate.

You can gift cash, shares or other assets into a donor advised gift account before requesting these be granted to your chosen charitable organisation.

SOCIAL INVESTMENT

Social investment is the use of repayable finance to help an organisation achieve a social purpose. You can make a social investment loan into a fund which is then used to make flexible, affordable loans (and sometimes blended finance grants) to social enterprises and charities.

Social enterprises and charities have a greater need for capital than ever before. Social investment loans are a source of affordable, flexible finance to help continue their charitable activities, stabilise, and plan for future growth.

IMPACT INVESTING

Impact investing is an investment strategy that aims to generate specific beneficial social or environmental effects in addition to financial gains.

Impact investments may take the form of numerous asset classes and may result in many specific outcomes. The point of impact investing is to use money and investment capital for positive social results.

COLLABORATION

Place-based giving, giving circles and networks are examples of collective approaches to giving. They bring together groups of individuals who donate their own money or time to a pooled fund, decide together where to give these away to charity or community projects and, in doing so, seek to increase their awareness of and engagement in the issues covered by the charity or community project.

Your financial planner can help you realise greater impact through your giving. Contact your planner here to find out more.

Articles on this website are offered only for general information and educational purposes. They are not offered as, and do not constitute, financial advice. You should not act or rely on any information contained in this website without first seeking advice from a professional.

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Sources: https://www.cafonline.org/personal-giving/professional-advisers/services-for-professional-advisers/giving-toolkit

Date written: 5^th November 2024.

Approved by Evolution Wealth Network Ltd on 15/11/2024.