Philanthropy

Report shows increased interest in good causes among some of those people who accumulated wealth in the Celtic Tiger years Philanthropy grows despite downturn, writes Dominic Coyle

IRELAND MAY be in the economic doldrums but interest in the area of philanthropy is growing, according to a new survey.

While it has yet to translate into a significant rise in "planned giving", there has been increased interest in the issue among those who accumulated enormous wealth during the Celtic Tiger years. It is estimated that around €500 million is currently donated to charity each year. Those involved in the sector are looking to double that number over the next five years.

Twenty-seven per cent of professional advisers surveyed for a new report, Trends in Irish Philanthropy - The Views of Those Who Advise the Rich, had noticed an increase in the number of clients inquiring about philanthropy over the last 12 months.

Tina Roche, chief executive of the Community Foundation for Ireland, said the survey was the first "comprehensive survey conducted on Irish professional advisers' view of philanthropy".

In the survey, philanthropy was defined as "planned giving" by a donor rather than once-off, spur-of-the-moment charitable donations.

The foundation, set up in 2000, links donors with causes in their particular areas of interest. It currently holds funds of €25 million and has made grants on behalf of donors of close to €5 million.

Despite the recent increase in interest, 77 per cent of respondents to the survey indicated that fewer than 5 per cent of their clients engaged in philanthropy.

Those who do use a wide range of approaches, the survey found, and are not clear on the difference between charity and philanthropy.

Asked whether they thought a change in the law to remove the current upper threshold for tax relief on charitable donations would result in more people considering philanthropy, 85 per cent of respondents said they believed it would.

In a separate question, tax savings were identified as a factor in people's decision to engage in philanthropy in Ireland - although considerably less important than the concept of putting something back into one's community, belief in a particular cause or respect for people involved in that particular charity, and the age of the donor.

Ms Roche urged the Government to improve the tax incentives available for those engaging in philanthropy.

She said measures introduced in the 2006 Finance Act that placed a cap of around €25,000 per annum on charitable donations that could avail of tax relief had been a retrograde step in encouraging greater philanthropy among high earners.

"We are already well behind the USA and probably a decade behind the UK in fostering philanthropy in this country," said Ms Roche. "We need to act now to remove the current restrictive climate."

Advisers taking part in the survey generally felt that clients would need assets of more than €1 million - not including their family home - before they would consider philanthropy.

In fact, close to a quarter felt that clients would not think in terms of philanthropy unless they had assets of €10 million or more.

"It is really important to reiterate that philanthropy is not exclusively the domain of the super rich," said Ms Roche. "We have permanent donor funds ranging from €25,000 to the high millions of euro."

The foundation is also likely to encourage more charitable giving in wills following a KPMG survey last year showing that 91 per cent of assets are passed on in wills to family, with around 4 per cent being invested in philanthropy.

The latest survey of wealth managers found that a majority of their high income clients who had made wills had left less than €10,000 to charitable causes.

Full survey results on www.communityfoundation.ie