Top Considerations When Setting Up Charitable Endowments

James Wilcox 10 August 2020


Setting up a charitable endowment or foundation is a rewarding experience, but one that family offices and HNW individuals must not take lightly. A London-based figure from the wealth management sector walks through the process.

James Wilcox, managing partner at Floreat Group, the independent investment firm based in London, writes here about what family offices and HNW individuals should consider when creating a charitable endowment. This is an important area when philanthropy is so front of mind amidst the global pandemic. 

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Charitable endowments have long been used by family offices and high net worth individuals as a vehicle for creating a lasting, positive legacy, providing a means of supporting disadvantaged members of society and committing the donors’ money to generating a worthwhile and continual impact. 

Now more than ever, family offices or individuals may be planning to set up their own charitable foundations. In the wake of COVID-19, the UK government has set aside millions to support small and medium-sized charities, and the importance of the NHS and the support of its staff has never been more visible.

The rise in environmental, social and governance-based investment has also driven demand for philanthropy, with increased awareness of the impact that one’s fiscal decisions can create. Giving has changed, and so have people’s ideas on how they want to give.

In the UK, it has become increasingly more complicated to create, register and run a charity. Regulation has been steadily increasing since the Charities Act of 2006, which gave birth to the Charity Commission – a regulator with 350 staff and a range of powers. Throughout the year, they investigate around 150 charities in relation to their activities. 

It is therefore vital to ensure that you have the correct framework in place to support clients through the complexities of the process of setting up a charitable foundation, and that everyone involved has an understanding of the weight of the process itself. 

Firstly, you must understand your client’s aims as a philanthropist: what causes are they passionate about? Do they have a global or local mindset? Take the time to understand the person sitting in front of you and to determine their core mission. Giving can manifest in many ways, so it is imperative that you identify the cause and a plan of action that is the best fit. 

I see a wealth manager’s role as one of joining up the dots, and collaboration is at the heart of this. What an adviser brings to the table is not just donations, but an overall network, which could play a pivotal role when embarking on a philanthropical venture. We are more than just our separate parts when we collaborate with one another. 

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