Philanthropy 50 and Lifetime Legacies - Spear's Magazine

Philanthropy 50 and Lifetime Legacies

Consider what good these billions could have done during the lifetimes of their creators.

Good news comes from America: the 50 most generous philanthropists gave $10.4 billion in 2011. Americans continue to lead the way in philanthropy, just as they have for a century and more. Yes, philanthropy has been necessary because the country lacks a European-style state, but the billions upon billions given to museums, universities, galleries and other charities go beyond strict necessity.

The most generous gifts, interestingly, are bequests. There are plenty of living donors on there – Paul Allen ($372 million in 2011), George Soros ($335 million), Michael Bloomberg ($311 million) – even if Bill Gates and Warren Buffett are excluded because their gifts were given as lump-sums previously. But topping the list is Margaret Cargill, who died in 2006 but whose estate, worth $6 billion, was finally liquidated last year, and after her comes William Dietrich, who died in 2011, leaving $500 million.

Neither of them was a slouch in lifetime. Margaret Cargill (below) set up a foundation with $100 million in 1997 and William Dietrich planned to turn $200 million into $1 billion through canny investing by the time he died; he got about halfway there.

But consider what good these billions could have done during the lifetimes of their creators. That's what Bill Gates and Warren Buffett have done, and they are leading a trend. Philanthropists not only want to see the result of their gifts (which is not unworthy) but also want to help direct its use, running it like their investments rather than a posthumous concern for someone else.

This raises an important question for the UK: what are we doing to encourage lifetime giving? As Ed Vaizey told us in his Spear's Talk at the Tory Party Conference, the government is encouraging donors to take advantage of Gift Aid and other tax breaks and he thinks there should be honours and public recognition for givers. (Margaret Cargill made her gifts anonymously (as was her right) and wanted no PR, a subtlety which would have done nothing to encourage other donors.) Spear's, with our 1 Per Cent Campaign, are very much involved in promoting giving during the lifetime.

Lifetime legacies are certainly in the atmosphere. As this proposal from Arts & Business says, 'Under current rules in the UK, lifetime legacies do not offer tax benefits to either donors or charities. Accordingly, there is little financial incentive for donors to make gifts to charity in the UK using lifetime legacies.'

'Irrevocable gifts of capital' can be made in various ways which allow the donor to draw an income from their gift as well as tax relief and the charity to use and leverage and plan for their gift, before finally receiving it on their death. You get not just a lifetime's use but an afterlife's use too.

If the UK can take the US's lead in these structures, philanthropy could start to boom over here.

To learn more about the Spear's 1 Per Cent Campaign, click here

To read more on philanthropy from Spear's, click here



 

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