Be­come a so­cial in­vestor

Jonny Cline con­sid­ers 21st cen­tury strate­gies for ef­fec­tive char­i­ta­ble giv­ing

The Jewish Chronicle - JC Magazine - - The State Of Donation -

ALTHOUGH THE UK Jewish char­ity scene is fairly tra­di­tional and in­sti­tu­tional, we are see­ing both char­i­ties and donors adopt­ing new tech­nolo­gies and trends. To­day’s donors ex­pect to have greater ac­cess to in­for­ma­tion, so char­i­ties are send­ing out reg­u­lar emails and post­ing their an­nual ac­counts on­line. They are giv­ing donors more con­trol by en­abling them to tar­get their do­na­tions to spe­cific projects. Donors are be­hav­ing more like in­vestors, who are look­ing for a good re­turn on their in­vest­ment. Rather than seek­ing profit, they are aim­ing to im­prove so­ci­ety through the port­fo­lio of char­i­ties they sup­port and they may drop a cause if they are un­happy with the so­cial re­turn on their in­vest­ment. Donors are also ad­vo­cat­ing for causes that they sup­port, us­ing so­cial me­dia to share in­for­ma­tion and crowd­fund­ing sites such as to in­vite friends to sup­port the same projects.

At UK Toremet we have iden­ti­fied three models of giv­ing — im­pul­sive, in re­sponse to a per­sonal or me­dia ap­peal; tax-driven and strate­gic. Im­pul­sive do­na­tions are not al­ways tax-ef­fi­cient for the donor. The Gift Aid not claimed on small do­na­tions makes up the vast ma­jor­ity of the £0.75 bil­lion of tax re­bates on char­i­ta­ble do­na­tions that go un­claimed

each year. Some tax-aware donors re­alise at the end of the year that, in or­der to max­imise their tax ben­e­fits, they must rush to make do­na­tion de­ci­sions, of­ten with­out time for care­ful con­sid­er­a­tion. A prefer­able alternative is strate­gic giv­ing — us­ing a char­ity ac­count to al­lo­cate money tax-ef­fi­ciently dur­ing the year to the causes that you and your fam­ily have in­ves­ti­gated and cho­sen to sup­port. You can also carry over your bal­ance from one year to the next in or­der to sup­port the causes that really mat­ter to you.

Lawyers used to ad­vise only six­fig­ure donors to man­age their

phi­lan­thropy, be­cause the costs of in­cor­po­ra­tion and re­port­ing are re­stric­tively high. To­day’s char­ity ac­counts are free to set up and can be man­aged on­line. Donors of all sizes and ages can open a char­ity ac­count with ei­ther a lump sum or a monthly di­rect debit, ask­ing em­ploy­ers to match con­tri­bu­tions from your pre-tax salary through the GiveAs-You-Earn scheme. With Gift Aid, you can choose how to al­lo­cate the ex­tra 25 per cent added to your ac­count by the tax­man — that’s a bet­ter rate of re­turn than any other ac­count you can put your money into!

Se­lect a char­ity ac­count that is not tied to one char­ity and does not limit the causes you can sup­port, ge­o­graph­i­cally or ide­o­log­i­cally. You should be able to use it to make tax-ef­fi­cient do­na­tions to overseas char­i­ties, in­clud­ing Is­rael, as long as the ac­tiv­ity you are sup­port­ing would be deemed char­i­ta­ble by UK law. It should al­low you to make im­pul­sive do­na­tions with­out los­ing the tax ben­e­fits, to give tax-ef­fi­ciently with­out the endof-year rush and to al­lo­cate your money care­fully, set­ting cri­te­ria and check­ing for the max­i­mum so­cial re­turn on your in­vest­ment, while us­ing the in­ter­net to man­age your port­fo­lio se­curely on­line. To­day’s savvy donors should be savvy so­cial in­vestors, tak­ing con­trol of the do­na­tion process and mak­ing their money work harder for the causes in which they be­lieve. Jonny Cline is founder and CEO of UK Toremet and or­gan­iser of the Amu­ta21C phi­lan­thropy con­fer­ence in Is­rael


Jonny Cline chairs the Amuta21 Con­fer­ence

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