The act of philanthropy can be defined as a desire to promote the welfare of others, expressed especially by the donation of money to good causes, such as charities or other deserving causes. It’s not straightforward to identify precisely what qualifies as philanthropy. You could count occasionally dropping some loose change into a collection box, in which case most of us could regard ourselves as philanthropists.
The scale of giving
To fall into the category of a true philanthropist, your scale of giving probably does need to be exceptional, such as Microsoft’s Bill and Melinda Gates, whose charitable foundation endeavours to enhance healthcare and reduce worldwide poverty. If philanthropy is measured in terms of self-sacrifice, a small monthly donation by someone of modest means could also be deemed generous.
Planning is key
For anyone hoping to embark on acts of philanthropy, they should carefully plan their acts of kindness and take advice on the effect their generosity could have on their wealth. For instance, philanthropists might be able to benefit from tax advantages (subject to current HMRC rules) such as Gift Aid on taxpayers’ donations or Inheritance Tax rate cuts, which could reduce your IHT liability from 40% to 36% if you leave at least 10% of your estate to charity.
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