Just over a third (36 per cent) of high net worth (HNW) charity donors have discussed the tax efficiency of their giving with a financial adviser in the past two years, research from the Charities Aid Foundation (CAF) has found.

This leaves almost two-thirds (64 per cent) of HNW donors giving to charity without seeking professional financial advice.

The CAF noted that as 86 per cent of HNW individuals were donating to charity, totalling around £8bn a year, this suggested some donors may not be utilising the tax incentive available for charitable giving.

Wealthy individuals were more likely to donate than the rest of the public (86 per cent vs 50 per cent), but only 7 per cent felt confident in their knowledge about charitable giving, and 48 per cent said they only know a little bit or know nothing at all.

The CAF warned that many financial advisers risked not meeting their clients’ needs, as just 36 per cent of advisers believed it was important to discuss philanthropy with clients, compared to 60 per cent of HNWs who feel it’s important to discuss the topic with their adviser.

However, when charitable giving is discussed, the vast majority (93 per cent) of HNW individuals said they found it beneficial.

Most advisers said they waited for clients to bring up philanthropy rather than initiating the conversation themselves, with 58 per cent saying the topic rarely came up and 15 per cent stating it was never mentioned.

More than three quarters (76 per cent) of HNWs were open to their advisers raising a range of philanthropic-related topics, such as the causes they were passionate about, the tax benefits, and ensuring charities are legitimate.

“There is considerable untapped potential for philanthropy in the UK,” commented CAF managing director, Mark Greer.

“Leading professional advisers appreciate the importance of philanthropy to their clients. But there is still work to be done, with only a third of the sector acknowledging this.

“As we continue to navigate the greatest ever transfer of wealth alongside an ever-growing spectrum of impact capital, there is significant potential for more substantial conversations on this topic between HNW individuals and their trusted advisers.

“We would like to see the FCA set out a plan for how all regulated financial advisers will receive training on philanthropy. Working alongside charities, donors and government, professional advisers can be part of a collaborative effort to reinvigorate the UK’s culture of generosity and better serve their clients.”

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