In a recent PCD podcast, David Bell spoke with Joe Crome of the Charities Aid Foundation (CAF) and Jaime McLemore, US-qualified private client tax partner at Withers, to explore what it really takes to build a meaningful philanthropic legacy. Using a fictional but entirely recognisable case study — Leah and Matt, a UK-based couple on the cusp of a major business exit — the conversation covered everything from donor-advised funds and dual tax structures to next-generation engagement and global grant-making.

The Missed Conversation

The starting point for any philanthropic discussion, according to CAF's annual research, should be much earlier than it usually is. Eighty-six percent of high-net-worth individuals in the UK give to charity — contributing around £8 billion per year — and 93% say they want to discuss their philanthropy with an adviser. Yet the vast majority report that these conversations simply aren't happening.

"The biggest barrier to giving money away is inertia and overwhelm," says Joe Crome. "Being worried that you won't be able to do it effectively — that you'll give to the wrong charity, or give the wrong asset. Those fears can paralyse people."

The opportunity for advisers is clear. A business exit is one of the most powerful moments to introduce the philanthropy conversation — capturing liquidity at its peak and helping clients think intentionally about what they want their wealth to mean beyond their own lifestyles. As Jaime McLemore puts it: "Even if they haven't fully formed their charitable goals, we can use this moment to do something really efficient with this event."

DAF or Foundation? Understanding the Choice

For clients like Leah and Matt — who want to give at least £2 million a year, with global reach and family involvement — the structural decision between a private charitable foundation and a donor-advised fund (DAF) is central to the planning conversation.

A DAF, as Joe Crome describes it, is essentially "a one-stop shop giving account" — a vehicle that hosts all of a family's charitable activity under one roof, managed by a specialist provider such as CAF. The donor makes an irrevocable gift into the fund, at which point tax relief is triggered, and then acts as an adviser, recommending how those funds are deployed to charities over time. The provider handles all due diligence, compliance, grant processing, and reporting.

The contrast with a private foundation is significant. Jaime McLemore is candid: "Running a foundation should be seen as a full-time job. It's incredibly time-consuming, and the legal and administrative burden is substantial." The compliance obligations, trustee responsibilities, public accounts, and governance requirements can quickly outweigh the perceived benefits of control and branding.

Increasingly, she notes, DAFs are edging out foundations — particularly for families who value privacy (DAFs allow donors to give anonymously), flexibility around asset types, and the ability to involve family members without imposing legal liability. "All the benefits, but none of the burdens," as Joe puts it — though he acknowledges that foundations retain an edge where donors specifically want to carry out direct charitable activities, or where the sense of personal control is paramount.

One common misconception is that a DAF lacks the identity of a foundation. In fact, families can name their DAF the "X Family Foundation" and operate a public-facing website, simply noting that grants are administered through a donor advised fund provider. The emotional and reputational experience of running a foundation is preserved, without the administrative weight.

Navigating US/UK Tax: The Dual-Qualified Structure

For couples straddling two tax regimes — as Leah and Matt do — the challenge of making giving tax-efficient across both systems is real. Both the US and UK set out criteria for the types of gifts that qualify for income tax relief, as well as determining their own lenses for how charitable funds are spent and granted out. Without careful planning, a US citizen in the UK may find they are missing out on maximising the eligible relief, and in a worst case scenario they can face punitive tax issues if they fall foul of the rules.

The solution, explains Jaime McLemore, is a dual-qualified charitable structure: a fully registered UK charity whose single owner is a 501(c)(3) US charity. A specific tax election allows the UK entity to be treated as transparent for US purposes, meaning a donor like Matt receives UK income tax relief/capital gains exemption through the British charity, while the IRS treats his donation as going directly to the American entity and grants the equivalent income tax deduction.

Additionally, the UK charity receiving the gift enables the donation to be grossed up by 25% thanks to the Gift-Aid scheme.

"It's not giving Matt an additional benefit," Jaime clarifies. "It's simply putting him in the same position he'd be in if he were purely UK resident or purely US resident. The US-UK income tax treaty covers a lot of double tax issues, but it doesn't address charitable giving — so this structure fills that gap."

For those contributing non-cash assets — such as shares in the business they're exiting — the planning becomes even more powerful. If the business qualifies for share relief in the UK, donors can not only claim relief on the value of the shares going in, but also eliminate the capital gains liability embedded in those shares.

Joe Crome notes that with listed or quoted equities, the process at CAF is straightforward; with private shares, there are additional liquidity and governance considerations to work through, but the goal is always to maximise what ultimately reaches charitable causes.

Building a Family Giving Strategy

Once the structural and tax questions are resolved, the more personal dimension begins. For many clients, the hardest question isn't how to give — it's what to give to, and how to make it meaningful for the whole family.

Joe Crome advises clients not to over-engineer the early stages. "Get started, try things, give to some charities and see how it goes." For those ready to go deeper, CAF works with families on a theory of change — starting from the end outcome they hope to achieve, then working backwards through the outputs, activities, and grant-making decisions that will get them there.

On involving the next generation, both speakers were emphatic. "Philanthropy is a great tool," says Joe, "because it's the one thing that picks young people's ears up in an otherwise dry conversation about family wealth." DAFs, with their structured but flexible governance, are ideal vehicles for giving teenagers and young adults a meaningful role — without the legal responsibilities of trusteeship.

Jaime McLemore has seen families approach this from both ends of the formality spectrum: casual Christmas conversations around the table, or full-day off-site strategy sessions with formal agendas and tracked outcomes. "Whatever works for that family is probably the right answer," she says.

The critical thing is communication — ensuring every family member understands the plan and has bought into it, so that wealth preserved for charitable purpose isn't lost to internal conflict.

Global Giving and Legacy Planning

The UK is, perhaps surprisingly, one of the most favourable environments in the world for international grant-making. HMRC and the Charity Commission impose sensible due diligence requirements, but few geographic restrictions — making it an attractive base for philanthropists with global ambitions. CAF sends funds to over 120 countries annually, managing sanctions screening, AML compliance, and jurisdictional due diligence at a scale no family foundation could replicate.

On legacy and estate planning, the same dual-qualified logic applies at death as during life. Both the US and the UK provide exemptions from estate and inheritance tax for properly structured charitable bequests — but the requirements differ between the two systems, and getting it wrong is costly.

The UK also offers a meaningful incentive: leaving at least 10% of an estate to charity reduces the overall inheritance tax rate. A well-drafted will, with the right charitable vehicles named as beneficiaries, can do significant work.

For families who have built a substantial DAF, the vehicle doesn't need to end with the donor. Successor advisers — typically children or trusted family members — can continue advising the fund across generations, turning a philanthropic structure into a true family legacy.

Joe Crome is a philanthropy adviser at the Charities Aid Foundation (CAF). Jaime McLemore is a US-qualified private client tax partner at Withers. This conversation was recorded for the PCD Group podcast series.