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Nurturing philanthropy in the current climate of decreased giving

Photo of Nicola Johnson Nicola Johnson
6 min

It’s old news that giving is down in the UK, and it’s hardly come as a surprise: in recent times we have been rocked by a pandemic and a war; we are living through one of the most tumultuous periods in modern British politics; and experiencing an acute cost-of-living crisis.

According to  Charities Aid Foundation’s UK Giving Report 2023¹ , while a generous response to the Ukraine war helped to drive the total amount given up by £2 billion on the previous year, donation levels remain below the pre-pandemic figures.

Moreover, not only was the spending power of that increase significantly undermined by rapidly rising costs, it was driven not as the result of more donors, but of more being given by the same number of people. Even more worryingly, a quarter of people reported they had made or were considering making changes to their giving, including reducing or cancelling regular charity donations as they themselves feel the pinch of the current economic crisis.

We are in the ‘business of giving’. One of our primary areas of focus is providing bespoke, expert support to our philanthropists – so we were encouraged to see our strong Annual Report 2022 figures. Not only did we see donations increase by 10 percent to just under £110m, but our DAF payout rate is also over double the UK DAF average at over 52 percent, and over ten times higher than the required payout rate of US charitable trusts. These figures reflect both a resilient generosity in the face of the cost-of-living crisis and a passion for the causes our donors support.

Reflecting on the extraordinary generosity we are privileged to facilitate, I believe there are three key factors that are proving instrumental in creating an optimal environment for our philanthropists: flexibility, partnership and collaboration.

A flexible approach

Modern philanthropists are looking for flexibility. The emerging generation is seeking a more holistic approach to philanthropy that effectively integrates financial, environmental, and social goals. They are focused on making a difference in critical areas such as race, gender, and the environment through impact investing and social entrepreneurship. They are on a quest to fund opportunities that achieve both profit and purpose and have the potential for capital to be recycled for future impact.


Such an innovative approach to philanthropy demands a more agile approach than the traditional charitable trust model allows. It can take several months and substantive legal fees to set one up and the administration and governance require significant ongoing costs. The regulatory reporting obligations also preclude anonymity.

The virtues of the DAF model

On the other hand, the increasingly popular Donor Advised Fund (DAF) structure offers a very convenient and economical alternative for organising your charitable giving. In addition to grant making, a DAF gives you the option to try to grow the balance of your account for the longer term by requesting that some or all of it be invested. You can also allocate your account balance to support a charity with a loan or other funding arrangement. Any return from impact investments made is then returned to your DAF for you to repurpose for further social investments or grants.

A DAF is also helpful in legacy-making; the donor can complete an Expression of Wishes to allocate funds directly to one or more charities or to appoint a named successor for their DAF account. This can be updated at any time without a need for a solicitor.  Donors also appreciate the protection of a DAF as it effectively acts as a neutral intermediary between the donor and the named charities.

There are no start-up costs, no annual returns and the DAF provider claims Gift Aid and takes care of any compliance and administration requirements. It also allows for anonymity, if preferred. In short, the DAF model is nearly always the most ideal option for gifts up to eight figures and is sufficiently agile to meet the wide-ranging needs of major donors. Admittedly it isn’t suitable for operational projects – that’s when you still need the traditional charitable structure – but advisers and fundraisers have a key role to play in helping their philanthropists understand the virtues of the DAF model.

The power of partnership

The need for a client-centric approach to business is a given. However, a shift from simply serving your clients to coming alongside them as partners can have transformational results. The DAF model encourages this approach as any donations made effectively belong to the DAF provider, not the donor, and can’t be returned. The donor has to request for allocations to be made to their chosen beneficiaries. This approach creates the opportunity to build a trusting relationship where the donor is empowered to explore their motivations and fears and to support the causes close to their hearts, free of the administrative and psychological burdens that can come with philanthropy. In short, they experience a joy that then releases them to achieve the full potential of their philanthropic aspirations.

The charitable trust structure can also promote partnership through its trustees; a carefully curated team of experts with complementary skills and experience can provide substantive support in grant-making strategy and decisions. Recognising this as a gap in the DAF model, Stewardship has introduced a Donor Advisory Board service that allows its major donors to benefit from the advice and support of family, friends and trusted advisers but without the legal and administrative requirements of being trustees.

Long-term trust through collaboration

Our experience has shown us that philanthropists are most empowered when all those supporting them collaborate effectively even though this can seem counter-intuitive as we seek to nurture and protect our client relationships. Moreover, fundraisers, wealth management advisers, and DAF providers, while they are all key stakeholders in the philanthropy environment also inhabit very different worlds, with correspondingly different languages and cultures.

Yet, collaboration can be a driver for growth for all parties; working together as a team creates an integrated approach to the philanthropist’s wealth and philanthropy management that provides comprehensive support. That support helps build long-term trust and confidence in the donor’s relationships with the charities they give to, their wealth advisers, and the team managing their chosen philanthropic vehicle. Fundraisers might benefit from viewing DAF providers as a complementary route to market that needn’t preclude a direct relationship with their major donors. Similarly, advisers might choose to view DAFs as complementary partners who can help them deliver superlative client service that ultimately benefits everyone involved.

Pioneering against uncertainty

As we survey the tumult in our macroenvironment and assess its impact on the world of philanthropy, it is understandable if we look inwards rather than outwards, holding onto what we know rather than innovating. However, this time of accelerated change and uncertainty can also represent a significant opportunity for us to move forwards boldly, adopting a more flexible approach to philanthropy that is built on partnership and collaboration; a pioneering stance that creates an environment where our philanthropists can enjoy a more integrated, empowered and joyful approach to their giving.

¹ Charities Aid Foundation’s UK Giving Report 2023

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This article originally appeared on the Alliance Magazine website, 24 October 2023


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Profile image of Nicola Johnson
Written by

Nicola Johnson

Nicola has led Stewardship’s major donor activities since 2010 and oversees over £160m in charitable funds each year, on behalf of over 800 clients. Under her leadership, the team  won 'Best Philanthropy Initiative or Offering' in the Wealth For Good Awards 2023 and ‘Philanthropy Team of the Year’ in the STEP Private Client Awards in 2020.

Together with her team, she seeks to serve generous philanthropists with expertise and authenticity, to enable them to release funds to the causes of their hearts in the most effective way possible.

Nicola and her husband, Mark, belong to a small Anglican church in rural Essex and together, they are passionate about Creation Care and the environment, Justice and care for the vulnerable, and generosity through hospitality.

Nicola is part of the senior Leadership Team at Stewardship and is a Trustee for TrustBridge Global Foundation, a Swiss Donor Advised Fund platform that provides cross-border grant making to donors who wish to support charities and foundations anywhere around the world. She is also a Philanthropy Impact member and a trained facilitator of the Generosity Path’s ‘Journey of Generosity’ retreat.