Use a detailed strategy to make the most of your philanthropy

  • Only 40 percent of investors surveyed for a UBS Investor Watch report, "Doing Well at Doing Good," were fully satisfied personally with the results of their giving.
  • Millionaires who plan their giving view it as more effective and are more satisfied; however, just 9 percent of wealthy investors receive advice from financial advisors on charitable giving.
  • To give in a smarter way, think about your goals, make a plan to achieve them, and then consult a financial professional.
Charity Philanthropy
Jamie Grill | Getty Images

Philanthropy holds immense promise in the 21st century. Global giving is growing and gaining visibility, creating opportunities never seen before. Recent years have seen a marked and promising change — giving wealthy individuals, families and corporations the opportunity to give more, to do it more strategically and to increase the impact of their social investments.

An increase in philanthropy

A growing number of philanthropists are establishing foundations and other giving structures to focus, practice and amplify their social investments.

There appears to be a growing belief that institutional philanthropy can not only encourage more strategic investment approaches but also facilitate collaboration, serve as a role model for others, and have a greater impact on the economic and social challenges being addressed.

Despite this increase in philanthropy, charitable giving is not satisfying its potential. Only 40 percent of investors surveyed for a UBS Investor Watch report, "Doing Well at Doing Good," were fully satisfied personally with the results of their giving, and according to the UN's Sustainable Development Goals, we need $5 trillion to $7 trillion of annual investment to meet the world's needs. While there are more than 260,000 unique foundations in 39 countries with assets exceeding $1.5 trillion, we are nowhere near that $5 trillion to $7 trillion mark in charitable giving.

More from Investor Toolkit:
When a robo-advisor is, and isn't, the right choice
Everything you need to know about target-date funds
Defer compensation now to build retirement wealth

More effective giving through planning

There is a way to scale impact — through collaboration. The global philanthropy report reveals over 90 percent of global foundations operate independently, and most of them are focused on the same causes: education, human services, health, and arts and culture. This could be a result of a "checkbook philanthropy" approach of responding to requests as they come in without incorporating philanthropic giving into a coordinated, strategic aspect of financial planning.

According to the UBS Investor Watch report, millionaires who plan the financial aspects of their giving view their approach as more effective and are also more satisfied with their impact; however, just 9 percent of wealthy investors receive advice from their financial advisors on charitable giving. An added benefit of intentionally planning charitable giving is the potential for tax deductions.

Untitled Document

Sign Up for Our Newsletter Your Wealth

Weekly advice on managing your money
Get this delivered to your inbox, and more info about about our products and services.
By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.

Many philanthropists are not aware of, or do not utilize, charitable-giving tax strategies beyond basic deductions, even though such strategies can enable them to give more. Individuals who want to give charitably need to assess their larger financial picture, including the best strategies to build and maintain wealth while giving back to the community.

Finally, UBS found that investors with $5 million or more feel much more satisfied with the effectiveness of their giving. This isn't because they donate more money. Instead, wealthier investors are more likely to use financial planning strategies for philanthropy, as well as tools to assess the impact of their donations. Less wealthy investors who use the same strategies as wealthier investors also tend to be more satisfied with their approach to giving and their impact on society.

How to give smarter

Here are some ways you can give smarter:

Think about what you want to accomplish.
When deciding how much and to whom to give, make sure decisions are grounded in a strong sense of your liquidity, longevity and legacy goals.

Make a plan. Understand your financial position now, what you expect it to be in the future and to what you want to contribute.

Bring in a professional. Discussing your options with a professional can help provide you with a full menu of options for sustainable investing and charitable giving that fit your financial vision and goals.

When it comes to philanthropy, it feels good to give, but with proper planning and guidance, it can also help reduce your tax burden, allowing you to give more and achieve your financial goals.

(Editor's Note: This column originally appeared on

— By Justin Demko, senior vice president, UBS

FA Hub

Latest Special Reports

  • Automation, AI and machine learning will radically influence the relationship between employers and their workforce.

  • Invest in You: Ready. Set. Grow. is focused on improving Americans’ money knowledge of saving, spending and investing.

  • Gavel and sound bock in front of hammer

    Silicon Valley’s meteoric rise left lawmakers playing catch up. Governments around the world are now busy implementing new rules and regulations, aiming to keep the tech titans in check but also foster a burgeoning digital economy. CNBC’s special report “Big Tech's New Rules” explores this trend, and what it means for investors, citizens and the technology companies themselves.