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If you are planning to make a charitable contribution, either during your lifetime or through your legacy, seek advice from a financial adviser to ensure it is managed in the most efficient way for you and the charity you wish to support, creating a true win-win outcome.
Why philanthropy really is the gift that keeps on giving
The word ‘philanthropy’ is derived from the Greek for ‘love of humankind,’1 and despite the daily pressure on household budgets, the UK remains full of love. We’re one of the most generous countries in the world for donating money to a huge variety of causes.2
Donations are the lifeblood that enables charities to tackle the pressing issues facing society, from seeking innovative treatments for illnesses and supporting the vulnerable, to working towards a healthier future for our planet. Yet many are on the brink of bankruptcy and need support more than ever.3
Why do we give to charity?
Giving feels good! Neuroscientists have found that generosity lights up the same part of our brain that responds to food and sex, describing kindness as “psychological chocolate.”4 Donating to a shared cause can bring families together, and reinforce values of compassion and thoughtfulness.
Research demonstrates that donors want to have a positive impact in the world, one that goes further than their own physical ability to make a difference, bringing benefits to society that reach beyond a lifetime.5
Health charities receive the most in donations from the public, with over £2 billion given to medical research and hospices last year, of a total £15.4 billion given to charities.6 Often chosen when someone close is affected, a donation to the relevant charity offers a beacon of hope and reduces feelings of powerlessness.
Meanwhile, those that gave to environmental causes spoke about wishing to protect the future for their children.7
It can be an empowering mental shift from ‘wealth for its own sake’ to ‘wealth as a force for good’. While personal motivation is key, structured professional advice helps to manage the process and boosts your impact.
The role of financial advisers
The focus of some financial advisers and wealth managers on growing and retaining wealth can mean that conversations about philanthropy are either completely missed or left until last in a financial planning strategy.8
In fact, integrating charitable intentions at a much earlier stage, not only gives you the pleasure of making a difference sooner, but it can also form part of your tax planning strategy. The UK government recognises the huge value to society of philanthropic giving and incentivises it through the tax system.
Your Holden & Partners’ financial adviser can help you find the right bespoke option for you. However, to give an overview, here are some popular ways of donating, and the tax efficiencies they bring.
Types of philanthropy
Gift aid
Most of us have ticked the ‘Gift aid’ box when donating to charity. If you’re a taxpayer, it enables the charity to claim an extra 25p for every £1 you give. But did you know, that if you are a higher-rate taxpayer, you can then claim back the difference between the tax you’ve paid on the donation and what the charity can recoup?9
Great for one off monetary donations, with some tax to be reclaimed for higher-earners, which is often reported through a Self-assessment tax return.
Donating land, property or shares
If you donate land, property or shares directly to a charity, it will not incur tax. That means no capital gains tax (CGT) is payable, and it can also result in you paying less income tax. You can deduct the value of your donation from your total taxable income.10
Directly donate land, property or shares to avoid CGT and reduce income tax.
Charitable trusts
A charitable trust allows you to dedicate funds to charitable causes, managed by nominated trustees (which can include yourself) and designed to continue beyond your lifetime. Contributions can be deducted from taxable income, and funds can grow free of Inheritance Tax, Income Tax and Capital Gains Tax.
There are several structures available, including Charitable Incorporated Organisations (CIOs), which provide limited liability with simpler regulation. Our trustee service helps trustees manage financial responsibilities, ensure compliance, and safeguard assets.
Charitable trusts are a powerful way of offering targeted, ongoing charitable support over extended time periods, but do come with significant admin and legal requirements that require professional guidance.
Leaving a legacy
Donating through your will enables you to leave a lasting impact that extends beyond your lifetime, targeting the issues you and your family care about.
Legacy gifts are a critical income stream for charities, making up on average 30% of fundraised income across the top 1,000 legacy supported charities. For animal, conservation, and disability charities, legacies provide as much as half.11 Legacy income is predicted to double by 2050.12
Leaving a legacy can reduce your IHT liability, because the donation is removed from the value of your estate before IHT is calculated. Additionally, if 10% or more of the ‘net value’ of your estate is left to charity, your IHT rate on the estate may be reduced from 40% to 36%.13
It’s always sensible to update family on your wishes, to manage expectations.
Leaving a portion of your estate to charity can reduce the overall tax burden on your beneficiaries while supporting causes you are passionate about.
How to supercharge your giving for significant impact
- If you are passionate about nature, conservation or environmental causes, it may help you target your support to know that philanthropic funding for environmental causes is particularly low compared to other sectors. In 2023, just 6% of public donations in the UK went to ‘conservation, environment, and heritage’.14 There are a number of organisations that enable you to direct your support towards the most impactful climate and nature charities.
- Charitable donations are very London-centric in location, so consider thinking more regionally to better spread the benefits.15
- Talk about your giving. So often decisions about money are silent and private, but it can really unite family and friends to have conversations about shared passions and values. This can encourage other people to think about charitable giving too.
Whether through a simple Gift Aid donation or a legacy in your will, the act of giving ensures your values live on. At Holden & Partners, we can offer a philanthropic advisory service that will help you make the right choices for your aims and circumstances.
1 Philanthropy – Etymology, Origin & Meaning
4 10 Reasons Why People Give (and 5 Reasons They Don’t) | CASE
5 FINAL-Wealth-Advisor-Report-compressed.pdf
7 FINAL-Wealth-Advisor-Report-compressed.pdf
8 FINAL-Wealth-Advisor-Report-compressed.pdf
9 Tax relief when you donate to a charity: Gift Aid – GOV.UK
10 Tax relief when you donate to a charity: Donating land, property or shares – GOV.UK
11 The Legacy Giving Report 2025 – Legacy Futures
12 The Legacy Giving Report 2025 – Legacy Futures
13 How Inheritance Tax works: thresholds, rules and allowances: Overview – GOV.UK
