'No one has ever become poor by giving'

With challenges facing clients and services providers alike of increased regulation, increased focus on high net worth individuals (HNWIs), greater transparency on personal affairs and governments looking to maximise tax receipts, you would expect less 'giving'. Post-2007, this was the perceived case, but away from the broadsheets and the sensationalism of modern journalism, wealthy individuals have been spending, and increasingly doing so on philanthropic enterprises.

But why? The first misconception about philanthropy is that it is relatively new. The term was actually coined in 5th century BC, but despite being effected by various technological and cultural changes, its purpose has stayed true - altruistic desire to improve welfare - and it has formed part of individuals, dynastic families and their associated corporations and organisations wealth structuring for centuries.

The exponential growth of such philanthropic activity is new, however, as is the demand for advisers, services providers and jurisdictions that can provide holistic solutions for global philanthropic agendas, while providing the appropriate level of transparency and anonymity demanded for such ventures.

This growth, fuelled in part by increased awareness of global issues and philanthropic opportunities, and in part by the global growth of HNW household wealth (which, according to research undertaken by McKinsey, is predicted to increase by around $15tn by the end of 2016), has brought new horizons and aspirations to philanthropy.

With increasing demand from clients, where should advisers look to for setting up philanthropic structures?

Satisfied clients

A 2013 study by US Trust indicated that 59 per cent of HNWI surveyed were not satis?ed with how their advisers approached the philanthropic conversation. This dissatisfaction is in large part re?ective of how little advisers know about the philanthropic environment. It reflects a lack of depth when addressing or relating to the client's charitable interests, legacy intentions or involvement of their children or grandchildren in the family's philanthropy.

The changing philanthropic landscape, different face and expectations of future clients and increasingly important role family dynamics play in shaping both philanthropy and client relationships are the new norms for advisers. From a business development and client services perspective, focusing on the tax-planning aspect of philanthropy and not the role or value of philanthropy in their client's life is a missed opportunity for both the adviser and their client.

Jersey has long recognised this trend. However, not all international finance centres (IFCs) have considered the importance of philanthropy and its integration into clients' wealth structuring. Although few donors participate in philanthropy to receive tax relief - something that was acknowledged in the UK government's Giving white paper published last year - understandably most donors wish to give to charitable causes and set up philanthropic structures as tax efficiently as possible.

Rising demand

Based on the same principles that have helped Jersey earn a strong reputation in facilitating global capital flows - tax neutrality, security, expertise and experience, as well as its reputation as a leading trust jurisdiction, with flexible companies legislation, a wide array of partnership structures and innovative foundations law - Jersey continues to help clients meet their philanthropic requirements.

This rising demand of international philanthropic structuring requirements, to meet the full spectrum of philanthropy, is set to stay. Jersey has positioned itself as a role model for other IFCs. If IFCs and advisers don't want to miss out on this opportunity, they need to recognise the importance of philanthropy for clients and that "no one has ever become poor by giving".

Geoff Cook is the CEO of Jersey Finance

He writes a regular blog about Jersey for Private Client Adviser