More wealthy people in Ireland are considering setting up long term charitable endowment funds, a tax and financial planning specialist has told the Irish Times.
“For the first time there is a generation of individuals in Ireland in their 60s and 70s with significant self-created wealth”, Deirdre Lyons of Davy stockbrokers told the newspaper.
“These individuals are beginning to think about if, when and how they will pass on their wealth and for some, these succession plans will involve the creation of a charitable legacy,” she said.
Philanthropy is also seen as a way for very wealthy individuals to educate their children in social and financial matters, without completely handing over the reins of the family business, Lyons said.
“It’s a way of bringing them on board without giving them a load of cash to do what they want with. If the family establish their own foundation the kids can help to run it,” she explained.
She reported that a lot of the conversations she has with private clients revolve around the wish to give something back and a lot of the scandals that have revolved around the charity sector have also made people more receptive to having their own charitable foundations.
Lyons added that tax changes introduced in 2013 have helped encourage the establishment of foundations.
“If an individual made a donation prior to 2013 it used to be that they would get a tax write-off. Now the charity gets the benefit of an income-tax credit, and can claim back some of the income tax that’s being paid by the donor. About €1 million becomes €1.4 million in the hands of the charity.”
Because setting up a foundation can be difficult, Lyons said, to help clients her company has set up the Davy Charitable Foundation Service.