#firstfiver - charitable donations and legacies
Thu 03 Nov 2016
Charities are brilliant at coming up with new ways to drive donations.
Generally the most successful are those that capitalise on something new or add an innovative twist in our everyday lives which captures our imagination (and money!). Take the Livestrong wristband in 2003 which raised significant funds for those suffering with cancer (and fuelled many more wristband campaigns) and the ALS ice bucket challenge in 2014, which capitalised on social media to grow a viral campaign raising money for sufferers of Motor Neurone Disease.
The latest successful campaign, again capitalising on something new, seems to be the #firstfiver campaign, aimed at giving your first new five pound note to charity.
Charitable giving is an amazing thing, and campaigns like #firstfiver play on the idea of raising funds through masses of small donations, which make little impact on those making the donation but a huge impact on the charities and the work they are doing.
One area that, to my mind at least, isn't pushed enough is legacy giving (making gifts on death through your will). No doubt this is because it's tricky to be innovative around the sensitive and generally taboo subject of death! Would be donors are also being reminded of their mortality, which perhaps does not make a great starting point to a fundraising campaign.
Nevertheless, making gifts on death can make a real difference. This is because the size of the gift you can justify in your will is often far greater than one you would willingly make in your lifetime; after all, you can't take it with you!
Gifts to charities on death are exempt from inheritance tax. Crudely speaking, if you give 10% of your assets to charity on your death, you will benefit from a reduced rate of inheritance tax which will apply to the rest of your assets. The result is that if you are considering giving more that 4% to charity, increasing your donation to 10% would be more cost effective.
Tim Snaith, private client partner at Winckworth Sherwood, is one of eprivateclient’s Top 35 Under 35 outstanding practitioners
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