By Anna Josse and Sophie Paquot, Prism the Gift Fund
With today's busy, stressful lifestyle we often do not have time to manage all the areas we wish to be involved with. One such area that often goes to the bottom of the pile is charitable giving. This sometimes plays on our conscience as we wish we did more or had the time to focus on our giving.
This problem is exacerbated by red tape; many of even the best-intentioned donors are puzzled – sometimes even put off – by bureaucratic difficulties. This may simply be problems with completing forms, even the simple ones relating to gift aid, or struggling to understand the inevitably more complex tax arrangements which are intended to make giving easier. It is also often a matter of dealing with personal tax reclaims after a donation has been made.
UK charity law has become more rigorous, and many individuals, corporations and even charity trustees are unaware of the fine details. In addition, managing numerous donations, securing the tax benefits and establishing a charitable trust with all its significant legal burdens is a painstaking process.
Help is at hand for the sophisticated donor who would like assistance in administering donations. You can put your money into a donor-advised fund administered by Prism the Gift Fund. This enables investors to make one contribution into the fund to receive all resulting tax benefits. Donors can top up their money whenever they wish and can also suggest which charities will receive their donations and when. Anonymity can also be arranged if desired.
Some people take their philanthropy a step further and establish a foundation. Prism offers a 'back office' for those that don't have the capacity themselves, dealing with the significant administrative burden that this entails. This can include the processing of grants to charities, board meeting administration, submitting accounts and more.
Prism and the Social Investment Appeal
Social enterprises are surplus-generating businesses that put social impact at the heart of their objectives. Well-known examples include the Big Issue, the Fifteen Foundation, the Eden Project and Café Direct. Social enterprises need access to long-term capital to be able to grow. Most, due to their legal structures and liquidity constraints, cannot raise equity and longterm financing.
Prism the Gift Fund has recently joined forces with the Big Issue Invest (BII) to set up an initiative called the Big Issue Invest Social Enterprise Investment Appeal. This initiative offers Prism clients an opportunity to invest in innovative businesses that create social impact as part of their charitable giving.
BII offers creatively-structured, 'equitylike' investment to social enterprises. Investees must have a robust business model, strong management and the potential for significant social impact. BII targets social enterprises that aim to prevent or cure social problems. It will invest in the areas of employment, education and training, health and social care, community-driven renewable energy and environment, financial inclusion and community development. A proprietary social impact assessment tool is used to measure and report on social performance.
How does it work for a donor to Prism the Gift Fund?
Prism the Gift Fund has negotiated with the Big Issue Social Enterprise Appeal to provide their clients with an opportunity to pool their charitable donations. The donation by the client would remain of a charitable nature, with any returns made from investment in the underlying social venture returning to the donor-advised fund within Prism, which would administer the returns for charitable purposes agreed with the client. Prism the Gift Fund/the Big Issue Social Enterprise Investment Appeal will then report back to the client on the social and financial returns from the investment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
