As a population we in Britain are becoming more aware about our charitable giving, and more interested in the benefits and practical results arising from it.

This interest follows from the culture of giving that is much more prevalent in America. In the US the mass affluent, that is the most wealthy 10% of the population, represent some 70% of the nation’s wealth and account for half of all individual giving there; in the UK the mass affluent represent 56% of the nation’s wealth but account for just over a fifth of individual giving. According to research there is the potential for UK citizens to double their charitable giving without any significant detriment to their lifestyle.

Philanthropy is one way of complementing limited funds from government organisations in order to improve the lives of those less fortunate, both at home and abroad, and to provide a social return on a donor’s investment.

There are a number of methods of tax efficient giving and most people are familiar with the benefits of Gift Aid and the Charities Aid Foundation schemes. For more substantial giving however a Charitable Trust, which is a separate legal entity, is a recognised vehicle for efficient and planned donations over a sustained period. Any individual can create such a trust and it does not need to include the word charity – Foundation or Endowment are possible alternative terms.

The principal advantage, apart from the tax benefits, is that the donor can maintain a close interest in the application of funds while sharing policy decisions with his or her co-trustees and delegating the administrative functions. Often Trustees will be drawn from a donor’s family but can include professional advisers or colleagues with a shared interest in the aims of the donor.

Charitable trusts are independent of any external body, but will be subject to regulation - in Scotland by the Office of the Scottish Charity Regulator, and in England and Wales by the Charity Commissioner. Compliance however is not arduous and involves the completion of an Annual Return and Statement of Account for the year.

As an alternative to a trust created during your lifetime you can draw your Will in such a way that a permanent charitable endowment is set up on your death funded by your estate.