Charitable giving – is it more effective to gift absolutely or establish a trust?
In the course of my professional work, especially when advising clients about making or updating a will, I am often asked for advice on the best way of giving to charity.
Charities carry out excellent work of great public benefit, nevertheless from time-to-time press reports highlight criticism of some charities, reflecting various concerns about day-to-day administrative matters or costs for example.
So for anyone seriously considering making a charitable donation, either in their will or during their lifetime, it is eminently sensible to consider carefully the best way of giving to charity, particularly if you want to donate a large amount.
There are two practical alternatives open to you – either to make an absolute gift or to set up a charitable trust.
If your gift is absolute, there is no opportunity for it to be in any way controlled, administered or monitored after it has been made, so there is greater opportunity for your funds to be spent on matters or projects of which you, the giver, may not approve.
Alternatively you may prefer to consider setting up a charitable trust, especially if you wish to donate a meaningful amount. While the legal documentation required is not difficult for an expert to compile, a charitable trust does provide three valuable benefits.
Firstly, your gift will be managed by trustees who are appointed to ensure all your donations are used exactly for the purposes and objectives that you have specified. These purposes might include the application of funds in the local community, for individual projects that are dear to your heart, or for the benefit of several smaller charities rather than larger organisations. Secondly, unnecessary financial wastage can be minimised through the use of a charitable trust. And finally, because trustees are legally accountable according to the Trustee Act (2000) as well as to the Charity Commission as the regulator, rigorous accounting and monitoring procedures are applied to ensure that every penny of each donation is applied exactly in the manner envisaged by the giver.
The choice of trustees is also very important – it is wise to include a balance of experience amongst your trustees so that the trust can draw on a wide variety of skills whenever decisions are to be made.
For support and advice on setting up and administering a charitable trust, contact the George Ide team on 01243 78668 or email us at email@example.com – our lawyers have wide-ranging experience of managing trusts and acting as professional trustees.
General, George Ide, Investment, Private Client