Unlocking £30 billion: how wealth advice could increase charitable giving

Research from Public First, commissioned by CAF, estimates that taking action on wealth advice could generate  £820 million from HNW donors annually. This models what would happen if the 2013 advice interventions to increase charitable bequests in Wills was rolled out for all forms of charitable giving. Over a decade, this would amount to over £8 billion in additional donations from improved advice, taking the total donations from HNW individuals to nearly £30 billion by 2035. That is a huge prize and one we want to see opened up to support charities delivering life-changing work every day.  

There is already a committed group of wealthy individuals who are contributing significantly to charity. Yet giving is not evenly distributed across high-net-worth Individuals. Providing tools and support through their advisers could encourage and inspire more people in this group to donate. 

At the Charities Aid Foundation (CAF), we have sometimes been asked whether advisers need to be experts in a particular cause area or have expertise in charitable impact.  In short, no, they do not need to be.

But it is important that advisers understand how the range of generous tax incentives for charitable giving work. When it comes to important topics like eligibility for Gift Aid, what a Donor Advised Fund is, or how to donate shares to charity, it is clear that advisers need to understand the financial landscape of giving in the UK. By understanding their clients’ giving goals and being informed about the best options for delivering on those goals, advisers can catalyse generosity. Additionally, getting it right can often mean more money going to charities doing great work. 

CAF has long been calling on the Government to make sure advisers are equipped with the skills and confidence to raise the topic of philanthropy with their clients and to advise them accordingly.  

As recommended by the independent, Treasury appointed, Social Impact Investment Advisory in its report on how to boost the impact economy, the Government should ask the FCA to develop a strategy for training financial advisers on philanthropy, including adding it to their continuing professional development and embedding impact-capital options into regulated financial-planning conversations.  

With the right strategic focus from the Treasury and from regulators, we can ensure that more advisers are having these important conversations with their clients and enable tens of billions of pounds to reach good causes.