Start the Charitable Giving Conversation

A study by U.S. Trust and The Philanthropic Initiative has shown that:

1. Proper tax and estate planning helps clients reduce taxes and protect wealth.
2. Clients believe advisors who incorporate philanthropy in planning have a more holistic strategic approach
3. Discussing giving priorities and tax needs leads to a better understanding and relationships
4. Being known as an advisor who understands philanthropy increases your credibility and reputation
5. Advisors who ask about giving priorities and goals are seen as having a deeper connection with clients and will maintain that with a surviving spouse
6. Advisors are seen as neutral partners who create a safe space to discuss gifts of assets or a future estate. Working with a community foundation reinforces that neutrality and commitment to community.
7. An advisor who includes the philanthropic conversation is seen as being for client benefit and impact
8. Advisors who talk about philanthropy and give and volunteer themselves often get more referrals from clients
9. Advisors who incorporate philanthropy in their practice have clients bring more assets into their book of business
10. Charities who see advisors as philanthropic partners are more likely to refer high net worth donors to them

As you know, some tax situations may be improved with charitable giving if your client is:

• Converting highly-appreciated assets to lifetime income
• Selling a business or real estate
• Accepting an inheritance or other windfall

In those cases, introducing charitable giving is an alternative to paying more taxes.

Other transactions require more personal conversations. Wills, estate planning and trusts are, by nature, end-of-life discussions. An estimated 64% of Americans aged 47-54 don't have a will. People give all kinds of reasons, but 14% admit they fear any discussion of death. And yet, more than 80% of Americans give charitably during their lifetimes. In helping your clients write their wills or trusts, you are likely the last person who will talk to them about their philanthropic legacy.

Three ways to start the charitable giving conversation:

• Listen for openings. The client asks about: the tax implications of receiving a large bonus; selling a business; worrying about highly-appreciated stocks with minimal dividends, and so on.
• Ask the question in a non-judgmental manner: "Do you need any advice about charitable giving?" Not, "Do you want to include charitable giving?"
• If you don't do this already, start with a written questionnaire. It can include questions about children and grandchildren, favorite charities supported now as well as future charitable giving through estate plans.

Whether your role is as an accountant, attorney, financial planner or wealth advisor, Ken Nopar suggests this in the Journal of Estate and Tax Planning [PDF]: "Explain to your clients that a conversation concerning their charitable interests will allow you to provide them the best professional advice possible." The author suggests asking these questions:

1. “Are you currently involved with any non-profit organizations? …as a donor, volunteer, board member?”
2. “Do you typically support the same charities every year or do you vary your support from year to year?”
3. “How do you decide which charities you support?”
4. “Who else helps you decide which charities to support?”
5. “Do you give the same amount each year? Upon what does it depend?”
6. “Which donations have you made that have provided the greatest satisfaction or regret?”
7. “Would you prefer to give anonymously or receive recognition?”
8. “What types of assets have you used when you have donated in the past? Cash, checks, appreciated stock, other non-cash assets?”
9. “Do you have any charitable vehicles in place, such as a private foundation or donor-advised fund?”
10. “Do you want to donate during your lifetime, at death, or for many years after your death?”