Research & Insights
Research & Insights
How generous are we?
The price and value of investments and income derived from them can go down as well as up. Capital held in this account is therefore at risk. Tax treatment depends on individual circumstances and may be subject to change in future. UBS does not provide tax advice.
A client's experience
Still not sure if a Donor-Advised Foundation (DAF) is right for you? We asked a client who opened a UBS DAF account in July 2014 why they opened it and how her family has used it since.
Having sold our business we were looking for ways to share the benefits of this new wealth. We wanted to consolidate our giving and create the means for the entire family to work together to select the causes we each wanted to support. In this way we hoped that our children would be responsible for identifying worthy causes that mean something to them. Our idea was to instil a real sense of the value and importance of philanthropy within the family.
We had considered setting up a private charitable foundation but were put off by the administrative burden and the set up costs. The straightforward nature of the DAF was an important benefit as were the tax advantages that significantly increased the amount that we committed to the DAF.
In the past there was very little organisation to our charitable giving. We were not previously in a position to make significant donations so ours had been very much adhoc and reactive.
There has been very little significant change to our charitable giving to date because we are only just beginning to release funds. The only change to date to note is that the amount we give in spontaneous donations which if anything has reduced since we set up our DAF.
Having our DAF has meant that we have had to be more responsible in the way that we give. As the sums we donate grow the need to ensure that the money works as hard as possible becomes increasingly important. As a result some form of due diligence has now formed part of our approach to giving.
On retrospect we would have preferred to have reduced our overall commitment to our DAF and allocated the remainder to a separate account from which we could make adhoc unrestricted donations. This type of flexibility would have been much more appropriate for us because it has been at times very frustrating that the DAF is restricted to registered UK charities. It has prevented us from spontaneously supporting local (unregistered) causes and certain specific overseas causes.
If you are in a position to permanently commit significant sums to charitable donations the DAF appears to be a great way to give in a sensible and tax effective way.
Did you know?
You can give to exempt charities
As well as UK registered charities you can also instruct grants to exempt charities, such as:
- Higher Education foundations and universities
- Community Societies
- Museums and Galleries
- Academy Trusts
Visit the Charity Commission website for more information about exempt charities.
You can donate the investment income
You can make donations with the income from the underlying investment portfolio – allowing you to have a separate giving plan of giving for the capital.
Do you still have questions?
If you still have questions, we would be pleased to help answer them for you.
