Professional Advisors and the Herefordshire Community Foundation
How One Professional Advisor Helped the Community
This case study shows how a community foundation was able to help an independent
financial advisor to help a client fulfil her charitable wishes.
One of his clients had been widowed the year before, and had been left very well
provided for. In fact she was now in the position of having quite a sizeable surplus
income, and this had given her an idea. She had long wanted to do something to help
older people in her area. Now she had the means to do so, and asked her independent
financial advisor (B) if he would find out about setting up a charity.
When B. started to look into it, he realised that it was more complex than at first
sight. As he knew about the local community foundation, he realised that this might
provide the solution.
As a result of a meeting with the Director of the Community Foundation, the potential
donor recognised that a Named Fund in the foundation would meet her wishes and needs.
She was provided with a Named Fund agreement, which sets out the objectives of the
fund and describes how it works on a day to day basis, and what she, as the donor
to the fund, can expect from the foundation.
Subsequently, B's client signed a covenant to give a five-figure sum annually for
four years. The tax reclaimed under Gift Aid was added each year to the endowment
income in order to provide a larger sum for grant making. The first grants were made
to charities for the benefit of older people in her designated local area. B's client
received news of the projects supported with grants from her Fund, and the foundation
kept in touch with her to check, for example, that she was happy with the kinds of
grants being made, and to give her the opportunity to have more information.
From the financial advisor's point of view, the outcome was very satisfactory. The
community foundation had provided a practical and effective way of dealing with his
problem and he had a satisfied client. Indeed everybody benefited, because her money
was now going to local causes for the benefit of older people. Following this experience,
B was able to provide information about the community foundation to other clients.
One was M., who tended once a year to give a small sum to her favourite charities.
Most were large well known national charities, but she too had lived for over thirty
years in the area. When she heard about the community foundation, she decided to
add it to her list of charities receiving a small donation once a year.
B. also enrolled his small family firm as a Business Partners to the foundation,
and began giving on an annual basis.
With a number of elderly clients for whom he had acted for a great many years, B.
found himself involved in dealing with all sorts of issues. In particular, he was
sometimes asked for help in relation to inheritance tax planning and thus the area
of Wills and legacies, including charitable bequests.
M. was one and at this point she was reviewing her Will. She had no really close
relatives and knew that she would like her favourite charities to benefit, as well
as the local community, but that was about it. B. arranged a meeting, and the outcome
was one that suited her perfectly. In short, the bulk of her estate would come to
the community foundation to set up a Named Fund: 50% of the annual income would be
divided equally between eight named charities, while the other 50% would be used
at the discretion of the Trustees to meet local community needs.
Giving regular gifts through a community foundation can make a real difference -
and these do not need to be large donations. A Named Fund within a community foundation,
for individuals and families who wish to provide a more substantial amount for charity,
is more cost effective and efficient than the registration of a new charity. Leaving
a bequest to a community foundation is effective, as the gift can continue to give
benefit year after year. In Hertfordshire, one professional advisor has found that
the community foundation enables him to give added value to his clients, by enabling
them to give added value through their charitable giving through the community foundation.
Every professional advisor wants to give the best advice to their clients and this
may well include how to give effectively to charitable causes. This is where Herefordshire
Community Foundation (HCF) can help you and your clients - we are professionals in
philanthropy and can help your clients give effectively, with the knowledge that
their donations are being used for good causes, within the County.
A registered charity, and one of a network of over 60 Community Foundations across
the UK, we are committed to helping local communities and organisations continue
to develop and make Herefordshire an even better place to live. We are also committed
to helping the least advantaged in our communities, and with our vigorous grant assessment
methods, we can help your clients give to individuals as well as registered organisations.
The guarantee of quality is in our membership of CFN - the nationwide network of
Community Foundations.
How can we help you?
HCF consults widely with local authorities and other statutory and voluntary agencies
within the County, so maintaining its awareness of both charitable needs and of existing
charitable activities. This enables HCF to identify areas of need, and to promote
charitable giving in those areas. We can also target money to particular communities
in the County.
HCF is relevant to your work in two particular ways.
1. You may have clients who are considering making charitable provision, to provide
for a legacy in their will or during their lifetime, to benefit a particular cause
or community they are interested in. They may be uncertain how to maximise the potential
benefit for their giving. For example, a client may feel the amount s/he has in mind
is insufficient to make a real impact, or may feel that the recruitment and retention
of suitable trustees may be a problem in the future, if they have sufficient funds
to consider setting up their own charitable trust.
HCF can help in a wide range of ways, through endowment development if the donor
wishes to make a permanent fund or with grant-making, if the donor wishes to make
current grants with their funds. It can set up a specific and named fund with even
quite small donations, and apply these to meet the donor's wishes. HCF can also combine
gifts from a number of different donors to provide a larger "pot" for specific application,
such as to education, arts, sports or to general social needs within the county.
HCF will always take account of donor's wishes - and tailor-makes it services to
meet donor's needs. As a registered charity, there are significant tax advantages
in giving through a community foundation. HCF can also receive gifts of shares and
property.
2. You or your clients may be involved in the administration of existing local charitable
funds. HCF knows that can often be a difficult and burdensome task. Community Foundations
can offer a very wide range of support and advice to local charities. Many of these
funds may be insufficient to effectively carry out their purposes, or may have out-of-date
"objectives" so that the funds are increasingly unused. HCF can offer support ranging
from advice and help in completing Annual Returns to taking over Trusteeship and
complete administration of the charity. It can advise and assist in identifying suitable
recipients for charity funding, and with applying to the Commissioners for a revised
scheme. Whenever HCF is asked to assist, it will do so in full consultation with,
and only with the agreement of, the existing trustees, and make arrangements to ensure
that both donors and trustees remain involved in the administration of that charity
to whatever degree they want.
The actual story on the right, drawn from another community foundation in the UK,
may give you some ideas as to how Herefordshire Community Foundation can help you
and your clients. We have a full Professional Advisors Pack in preparation, which
will provide you with more detail about our range of services. Do please contact
us to learn more about the ways in which we can help you.
