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Putting "Venture" Into Philanthropy
Tom Burroughes
7 November 2024
Topics such as education, healthcare and perceived social injustice drive much philanthropic activity, a sector that has shifted from being in reaction mode during the pandemic, a senior figure at , a firm which invests in treatments and technologies that can fix spinal cord injuries and paralysis. It is clear that progress must happen. Last year, Stonehage Fleming said its 2023 Four Pillars Of Capital research found that although 86 per cent of families consider philanthropy a central part of their values and purposes, 64 per cent don’t have a pre-determined budget, and base donations on an informal process. Only 7 per cent of respondents had a formal process of weighing up the contribution they make. (On a related note, see this opinion article from the editor about the role of philanthropic advice and trends in the wider philanthropic space.)
DAFs
Another trend is the rising use in the UK of donor-advised funds (DAFs), already a much larger and established sector in the US. (According to National Philanthropic Trust UK, DAF assets under management totalled more than £2.5 billion ($3.21 billion) in 2022 – an all-time high.)
An advantage, so DAF advocates say, is that they enable donors to retain anonymity and tap into existing causes, pooling resources that generate benefits from scale. Another driver in recent years has been the rising levels of bureaucracy associated with charitable giving, which has driven up costs, Henderson said.
“There is a lot more red tape than there was in the past in setting up your own foundations,” he continued.
The multi-family office can draw on the experience of the founding families and other clients to feed into philanthropic conversations. “Learning from the practical experience of working with many generations of client families serves us well,” he said.
Looking ahead, the organisation expects more work with families to formalise how they meet their philanthropic goals. “I am sure this will become a lot more important,” he added.
The revenue model
This news service asked Henderson whether the advice his firm offers for philanthropy is included in the overall service fee that clients pay, or whether it is separate.
“We work with our clients and look to clearly define the scope of our engagement around philanthropic advice and support; in most instances this will be an extension of an existing relationship and provision of other advisory or consultancy services. Where appropriate, any associated additional charges will be incorporated into the fee arrangements we already have in place,” Henderson said.
Looking ahead, Henderson expects that the way in which giving and its subsequent impact is monitored and reported will become more standardised and formal.
For other examples of coverage on these topics, earlier in 2024 this news service interviewed Nigel Kershaw OBE, FRSA, chair of , and co-founder of Big Issue Invest and The Big Exchange, for his particular insights on philanthropy and using investment as a tool for change.