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Natalie Pinon: Entrepreneurs are thinking carefully about the reputational risks of giving

In our latest newsletter, The Lede, we sat down with Natalie Pinon, Director of Development at NPT-UK, to talk about the reputational risks of giving for entrepreneurs and the advantages of DAFs.

This month’s interview is with Natalie Pinon. Natalie Pinon is Director of Development at NPT-UK, the leading provider of UK-based donor-advised funds (DAFs). With over 15 years of experience in philanthropy and social impact, she previously held leadership roles at Social and Sustainable Capital, Novator, and the Charities Aid Foundation, and has advised the UN and OSCE.

Are philanthropists thinking more about reputation?

In today’s highly transparent world, philanthropists are thinking more carefully about the reputational risks of giving. Donors are increasingly keen to highlight the impact of a charity’s work rather than the gift that enabled it, as well as ensure that their giving reflects their values. Taking time to conduct due diligence on charities is extremely important.

With a DAF, philanthropists can have peace of mind that the DAF provider will conduct the necessary due diligence on the recipient charity and handle all regulatory administration.

Why do you think DAF contributions are on the increase?

NPT UK has published the annual DAF report for five years now. In my opinion, the main reason contributions are on the increase is that more donors and their advisors are showing a better understanding of the role that DAFs play as an alternative to setting up their own trust or foundation.

Donors in the UK and globally are choosing DAFs because of their flexibility and low maintenance requirements. They also allow them to focus on the exciting and rewarding part of supporting great charitable causes, rather than the hassle of having to manage their own structure and due diligence.

Why are DAFs good vehicles for entrepreneurs?

DAFs work well for entrepreneurs because they can be set up within days, meaning an individual can set aside philanthropic capital at the point of a liquidity event for instance, and do so tax-effectively. DAFs can also take a wide range of asset types as charitable contributions, including hedge fund or private equity interests. Finally, the overheads are very low.

What are the reputational benefits of using a DAF?

With a DAF, a donor or family has the option to recommend grants anonymously. This may be useful if the family wishes to retain privacy around their giving at certain times. A DAF also gives the donor peace of mind on regulatory compliance, including legal and operational due diligence on charitable grantees.

Why a DAF rather than a charitable foundation?

In the UK, a charitable foundation can take months to set up whereas a DAF takes days. A donor may name their DAF whatever they wish, just as they would with their own structure, and they may use the name publicly.

When a donor uses a charitable trust or foundation, they must handle the day-to-day operations, including appointing trustees, regulatory reporting, and grantee due diligence. When a donor chooses a DAF, all compliance and reporting are handled by the DAF sponsor.

In spite of their advantages, DAFs are not always the answer. Sometimes, donors want their philanthropy to run specific operational programs. In this case, a separate charitable foundation may be necessary since DAFs can only make grants to qualified charities.

About Natalie Pinon

Natalie Pinon is Director of Development at NPT-UK. She was previously Director of Impact for Social and Sustainable Capital, the UK-based impact investing fund. Natalie began her career in financial services before moving into the international development field, where she worked for the United Nations Secretary General’s office and later the Organisation for Security and Cooperation in Europe (OSCE). She was Head of Philanthropy at the London-based family office Novator and Head of Global Philanthropy Advisory at the Charities Aid Foundation.

About The Lede

This article was originally published in The Lede, Transmission Private’s monthly newsletter that tracks the future of reputation management. Featuring interviews with leading private client advisers from the worlds of law, finance, and accountancy, sign up today to receive the newsletter in your inbox every month.

Transmission Private publishes a monthly newsletter that tracks the future of reputation management for private clients.

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Transmission Private publishes a monthly newsletter that tracks the future of reputation management for private clients.