As a high-net-worth individual, you have a unique opportunity to not only build wealth but also make a lasting positive impact on society. While financial success offers a plethora of choices, incorporating philanthropy into your savings strategy can be deeply rewarding.
Why give to charity?
According to a report by Charities Aid Foundation (CAF), 42% of people cited the enjoyment they receive from giving as a key influence, and 96% said they felt they had a moral duty to use what they had to help others.
By channelling your resources towards causes and initiatives that align with your values, you can create a legacy for the greater good. In this post, we explore how you can maximise your wealth in traditional savings accounts, to put you in good stead for charitable ventures.
Benefits of traditional savings accounts for philanthropy saving
Traditional savings accounts have long been a staple for safeguarding wealth while earning interest. The funds in savings accounts are often protected by the Financial Services Compensations Scheme (FSCS), making them the ideal ‘home’ for your cash when you’ve committed to a charitable donation. With so much depending on your generosity, being risk-averse and keeping your money safe is particularly important.
In addition to serving as a cornerstone for financial stability, savings accounts offer easy access to your funds, allowing you to withdraw money whenever you need it. This liquidity can be beneficial when you're ready to make a philanthropic contribution, as you can quickly transfer to the recipient.
Easy separation of funds is another reason to use savings accounts for money meant for charitable purposes. By using a separate savings account(s) for your philanthropic goals, you can keep your funds distinct from everyday expenses. This helps to maintain clarity and ensures the cash goes towards its intended use.
Creating a strong foundation for philanthropy
By effectively managing and maximising the returns on your cash, you can establish a strong foundation for philanthropy. Some strategies include:
- Goal-orientated savings: Identify specific financial goals for your savings, such as setting aside a percentage of your income for philanthropy or earmarking funds for a cause that resonates with you. This approach ensures that your savings align with your values and helps foster a sense of purpose in your wealth management strategy.
- Diversification: Diversify your savings across different types of accounts to improve returns while managing risk. Explore options such as high-interest savings accounts (normally fixed-term) and instant access savings accounts to strike a balance between stability and growth. It’s also important to ensure cash is covered by the FSCS, by spreading any amount of £85k across multiple accounts.
- Long-term investments: Consider allocating a portion of your cash to a range of long-term savings accounts, such as a five-year fixed-term account. Usually the longer the term, the higher the rate. This means they have the potential to generate higher returns over time and can provide additional resources for philanthropic initiatives down the line.
Leverage savings to create lasting change
Once you’ve built a basis, you can consider how to leverage your wealth towards a cause. Kick-start your philanthropic journey with these four steps:
- Identify your philanthropic vision and the causes you’re passionate about. Whether it is education, healthcare, environmental conservation, or social justice, clarifying your philanthropic goals will help you focus your efforts on the desired outcome.
- Thoroughly research organisations and initiatives that align with your chosen causes. Examine their mission statements, track records, and financial transparency to ensure that your contributions will be put to good use.
- Consider adopting a strategic approach to your philanthropy by identifying areas where your financial support and expertise can create long-term, sustainable change.
- Seek expert advice. Engaging with financial advisers and philanthropic experts can provide valuable insights on effective giving strategies.
How can cash deposit platforms support you with philanthropy saving?
A cash deposit platform offers a convenient savings solution by bringing together a collection of traditional savings accounts under one roof, accessible through a single application. This includes a variety of banks, rates, and terms that cater to many requirements.
For individuals with philanthropic interests, safeguarding and growing large sums of money becomes effortless with a cash deposit platform like Flagstone.
By enabling seamless money transfers between accounts, you can easily diversify your cash across multiple banks without the need to go directly to each one. This flexibility allows you to keep your donation funds separate from your other savings while still maintaining a comprehensive view of all your accounts.
Access to a wide range of banks and their respective interest rates also enables you to compare rates and select the options that offer the best returns.
Experience the benefits yourself, open a Flagstone account with us today.
This article is not financial advice. If you would like advice on your savings and investments, consider speaking to an expert.
