NEWS IN FOCUS: Will planned giving work in the UK? - US-style planned-giving schemes may hit several hurdles in the UK, not least of them the embarrassment factor, writes Julie Pybus


Wealthy younger people could be enticed to give to charity with new US-style financial products such as charity ISAs, following discussions between fundraisers and financial services representatives over the coming months.

The Giving Campaign has commissioned Henley Management College to investigate the feasibility of launching US-style planned-giving products in the UK.

In the US, partnerships between financial services and charities, along with a favourable tax regime, have created a range of sophisticated products that provide an income for the financial company, a donation to charity and tax breaks for the donors. These include pooled investment funds for donations and life insurance policies that benefit charities.

In the US, planned giving , including legacies, generates more than 40 per cent of voluntary income. Similar schemes have been tried in the UK, but with limited success.

Adrian Sargeant, chairman of Henley's centre for voluntary sector management, says: "There is a hole in our fundraising portfolio. We need to target younger, wealthier individuals who might consider a donation if it was fun for them and there was a new proposition to encourage them to donate."

At Harvard University in the US, planned giving is a significant fundraiser - primarily for larger gifts. The university's associate director of planned giving, Jonathan Chines, says the university benefits from gifts of shares, cash or property that raise an income for the donor during their lifetime but pass to the charity upon their death.

One of the principal reasons for similar products not being developed in the UK, according to Sargeant, is the lack of collaboration between financial services and charities. In the US, financial advisers frequently liaise with fundraisers to identify the best product for their client.

However, in the UK the word "charity

rarely crosses the lips of financial advisers. A study by the Giving Campaign last year revealed that most UK financial advisers are too embarrassed to raise the issue.

A spokeswoman for the Association for Independent Financial Advisers says: "Clients may feel insulted if they are asked to give. They may feel that their financial adviser is giving moral advice rather than financial advice."

In the US, the opposite is true. Chines says: "Charitable giving is so ingrained in the American psyche there is not the same level of embarrassment. Nine times out of ten financial planners will raise the issue with their clients."

On the charity side too, there are barriers. Sargeant says: "The majority of charities do not view themselves as being in the business of providing stewardship of their donors. Charities should think about using products that genuinely help the individual to plan their giving, plus their tax affairs - and to feel good about their gift."

There would also need to be further tax changes. For example, to make a charity ISA work, there would have to be benefits for financial services, the charity and the donor. "At the moment there is not enough money in the pot for it to be viable,

says Sargeant.

Henley Management College will examine barriers such as these. The research should be completed by the end of June, when the results will be distributed to relevant parties and government ministers.

Lindsay Boswell, director of the Institute of Charity Fundraising Managers, welcomes the study, but sounds a note of caution: "Just because it works in the US doesn't mean it would work here. I'm not convinced there is a glaring hole in our fundraising techniques when one looks at factors such as cultural differences, the attitude of the financial services industry and the newness of our tax-efficient-giving regime."

And cultural differences may be tough to overcome. According to AIFA, financial advisers need something to get over that hurdle of embarrassment, such as literature about donations that they could hand to clients. Changes in attitude take a long time to achieve.

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