Four out of five philanthropists support local charities, according to research by Coutts among over 100 of its clients. The research has been published alongside a guide Inspiring Local Giving in association with New Philanthropy Capital and Community Foundation Network. It reflects  the government’s localism agenda and Big Society , that aims to put communities in the hands of the people. The guide gives examples of how philanthropists can support local communities from grant-making to social investment, co-funding or setting up a charity or social enterprise.

Head of UK Philanthropy at Coutts Maya Prabhu says: “Our new guide illustrates the practical steps and considerations people can take as they embark on their philanthropic journey. It also acts as a source of inspiration to those who want to make a real difference to the communities that matter to them.”

The guide features case studies of philanthropic giving. One example is chair of Greggs bakery company, Ian Gregg. He set up the Greggs Trust in Tyneside and has given £300,000 a year to a number of organisations. He describes how it was difficult initially, deciding how to distribute money. He turned to the Community Foundation in Tyne and Wear, which helped him to establish a fund and he used its expertise to find suitable grantees. He advises philanthropists: “Look to work with like-minded people to increase the impact you can have and not to be afraid to step back and let good, competent organisations determine the best use for your giving.”

The guide also gives examples of social enterprises and small charities tackling issues in the news. One example is LEAP, which helps prevent knife crime and resolves local conflicts. Another, Smart Savings helps clients to manage their finances and reclaim mis-sold financial products. The report says there are 62,000 social enterprises in the UK, contributing more than £24bn to the economy.

Another case study features Andrew Preston, a former hedge fund manager, who returned to his home town of Middlesbrough in 2008 to establish a property company. He also decided to set up the Middlesbrough and Teesside Philanthropic Foundation in April 2011. He asked people with connections to the area to help support community infrastructure projects and services by becoming patrons of his Foundation, contributing £2,750 or £4,750 if they wanted to become corporate patrons. This has attracted 23 patrons and secured £130,000 as well as good media coverage.

He says: “The first step to setting up a local charity is to recruit a few key players, who are equally passionate about the local area.” He adds: “When identifying a cause to support, work out what is important to you and go where your heart is.”

The guide poses questions philanthropists might consider such as:

• How and where might my support make a difference?
• How do I find effective organisations to support?
• How can my support lead to sustained change?

It gives tips on using intermediaries, the local media, funding through a local community foundation, providing funding directly to local groups and peer networks. It also gives local snapshots of areas, showing levels of deprivation, funding and need. These include Leeds, Cardiff and Lambeth.

Founder of Localgiving.com and Holiday-Rentals.com, Marcelle Speller OBE says in the foreword to the guide:  “Local philanthropy gives me a sense of community, of belonging, and it recharges me. You can see that you are giving effectively, and have the most joyous, enriching experiences.”

Philanthropy UK's Autumn Magazine publishing in October focusses on community philanthropy and is available free by subscribing here.

Read more about what motivates people to get involved in local issues

Read about why rich people give