How we helped Aziz and Elspeth make a difference to their community

Making it possible to use your wealth for good

High net worth people often want to use their money to help causes and communities that are important to them. We’ve found that, as well as donating to favourite not-for-profit organisations, many of them want to set up highly focused charities, specifically to help their local communities.

Getting to know Aziz and Elspeth

Aziz and Elspeth have strong beliefs about the importance of community and the need to look out for less fortunate neighbours. When they were ready to sell their business, they decided to use some of the proceeds to create a community orchard with a pavilion where they would run a drop-in centre and offer training for young people seeking careers in horticulture.

Their business had been an integral part of their community, as a popular local employer and event sponsor. Now they decided to name the charity after the company to maintain the goodwill they had built over the years.

Why Aziz and Elspeth needed our help

When Aziz and Elspeth first decided to establish their charity, they hoped to be very ‘hands-on’ with its work, and also involve their two adult sons and their grandchildren. The couple were proud of having worked their way up from poor backgrounds into being leading lights of their community, and they wanted the younger generations to have the same drive and ambition.

They asked their lawyers to help them establish the charity, appoint trustees and register it with the Charity Commission.

Aziz and Elspeth had provided more money than would be needed for their planned projects and wanted to invest the surplus for both income and growth. According to Charity Commission conditions, the Trustees were obliged to seek ‘competent professional advice’ to ensure the money was invested wisely and avoid any conflicts of interest. Their solicitor recommended Canaccord Wealth to provide financial advice and manage the investments.

Our Canaccord Wealth solution

Working closely with the couple’s solicitor and accountant, we advised Aziz and Elspeth to fund the charity with a gift of shares, as this would avoid capital gains tax. The charity could also claim Gift Aid on the value of the shares, making it an even more tax-efficient way to provide funding.

We helped them to write a ‘governing document’ listing any limitations on the kind of investments they would accept. For example, they wanted a portfolio investing in sustainable themes and also wished to exclude any companies that carried out testing on animals, or used research derived from animal testing. Once the document was officially agreed and recorded, their portfolio had to remain within the agreed scope stated in the document.

We carried out a cash flow planning exercise with them, which showed that they would need access to specific amounts at different stages of the project, so their portfolio needed to be flexible. We advised them to split it between long- and medium-term funds.

We also helped Aziz and Elspeth to consider how to involve their grandchildren in the charity, and use it as a way to help them learn about managing wealth and its responsibilities.

What happened next

The Trustees agreed with our suggestions, accepted our recommendations, and were happy with the chosen investments and fund managers. They now meet regularly and keep meticulous records to ensure the charity stays within its terms of reference.

Elspeth and Aziz’s two sons have joined the Board of Trustees, and the grandchildren volunteer at the charity most weekends. When they reach 18, they’ll be able to attend Trust board meetings and become more involved in decisions.

Keeping in touch

We now meet the Board of Trustees every six months. We continue to advise them on strategy and ensure their portfolio makes full use of tax allowances. We alert them to changes that might affect them, particularly if any of their investments start to fall outside the charity’s policy document.