Philanthropy

 

The world over, more and more people are getting philanthropic i.e. they want to devote time and/ or money for larger social good. Earlier, the approach was to set apart some money in their will for philanthropic purposes. Increasingly, people want to give away part of their wealth during their life time and see the positive change around them. Thus, philanthropy is becoming a part of everyone’s life.

Some people, who wish to give away a part of their wealth, set up dedicated trusts for specific social objectives such as promotion of education, healthcare or culture. This is a format where the philanthropist is taking greater ownership for the activity. As sponsor, the philanthropist will appoint one or more trustees who will manage the affairs of the trust. The overall charter of the trust viz. what it will do and will not do, how the trust will take decisions, how trustees will be appointed or changed etc. are incorporated in the trust deed.

An alternate format is to donate money or time to some other social institution which is already engaged in the activity. The philanthropists, in this case, choose to leverage on some other existing institution, rather than create another institution. Even in this format philanthropist can put conditions on how the donation will be used.

This alternate format is particularly suited for people with smaller amounts to donate. The cost, time and effort that would otherwise go in establishing and running another institution can be better channeled to the beneficiaries through an existing institution.

In the case of regular donations during one’s lifetime, the approach that is often taken is to donate a portion of one’s regular income or windfall gains. Some people sell some of their shares from time to time, and donate the proceeds to philanthropic activity.

Contribution to philanthropy through Will should be done in consultation with a lawyer. This will ensure that other beneficiaries do not make adverse claims and disrupt the philanthropy.