Giving with maximum impact


The scale and scope of philanthropy are developing rapidly,  Sam Orchard of BOW Trustees examines the trends


PHILANTHROPY HAS LONG been an avenue through which the wealthy give back to society, but in recent years the scale and scope of philanthropy has evolved. According to a 2024 report from Altrata, 30 per cent of individuals with a net worth more than $100 million have a private foundation. The same report says global giving by UHNWs increased by 24.1 per cent between 2018 and 2022, to $189.7 billion. High-profile philanthropic structures


such as the Gates Foundation and the Patagonia Purpose Trust are leading the way in showing how private wealth can be used for social good. The Gates Foundation, co-founded by Bill and Melinda Gates in 2000, stands as one of the largest and most influential philanthropic organisations in the world. It has contributed billions to global health, education and poverty alleviation efforts. Bill Gates is among 250 of the wealthiest philanthropists in the world who have signed up to the Giving Pledge – a pledge to give the majority of their wealth to charitable causes in their lifetime or through their wills. The Patagonia Purpose Trust, established


by the founders of Patagonia, Inc. in 2022, was created to ensure that the company’s profits continue to be directed toward environmental causes. The trust has transformed Patagonia into a vehicle for


lasting environmental impact, with a structure that allows the company to remain privately owned while its profits support green initiatives. This demonstrates a growing trend:


private wealth is increasingly being directed into structured vehicles that ensure long-term philanthropic goals are met. With these large organisations setting the stage, smaller structures have followed suit, with strategies to create sustainable, high-impact legacies. Research from the Bridgespan Group in October 2024 suggests that a wide range of vehicles are being used, with the number of vehicles increasing significantly and the most active being smaller. As private capital continues to grow, the use of these structures will only increase.


CHOOSING A STRUCTURE Donors face several challenges when establishing structures that can significantly influence the effectiveness of their philanthropy. One of the first decisions a donor faces is choosing the right structure. Two common choices are foundations and trusts. Both offer a great degree of flexibility over how funds are distributed, and can be draſted flexibly in order to achieve the required outcome of the donor and to include relevant decision-making powers. Philanthropists must also consider the


level of control they wish to maintain over their structure. Some donors may want to retain a high degree of control over their philanthropy, while others prefer to delegate management to a professional board. The constitution of the board, the involvement of family members and the use of external advisers are all factors to consider. The tax landscape is another key consideration. Optimal structures involve tax neutrality, allowing capital to be invested for future purposes without investment returns being taxed. However, there can be taxes on excess capital or certain income streams that must be considered. The level of transparency required is


another critical decision. Some philanthropists prefer full transparency to


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