For Financial Advisors: Expanding The Philanthropic Conversation

Aligning Conversations with Client and Donor Needs

Several studies have been conducted by financial institutions recently to assess their clients’ philanthropic activity and needs. The results tell us that the philanthropic conversation is expanding in America, and that donors, as well as potential donors, want to have meaningful conversations about their giving. Here are some of the findings:

–In a U. S. Trust study of high net worth clients, 67% now discuss philanthropy with their advisors, up from 55% in 2013. Most clients report they would like these conversations to occur sooner in the client-advisor relationship.

–Donors report tax advantages are not their primary reason for giving, and 76% report that they would not change, or will increase, their giving as a result of the 2017 tax law.

–The primary reasons for giving among high net worth donors are a passion for the cause, a desire to impact their community or the world, and a desire to give back.

These statistics offer a clear signal to both advisors and nonprofit leaders that they must engage in conversations deeper than “the ask”. Donors, and potential donors, want to have substantial discussions about their philanthropy. They want to learn more about various ways to give, receive support in identifying significant needs, and have access to data that allows them to evaluate the causes they care about.

Charitable giving through a Donor Advised Fund (DAF) is also growing substantially. After many years of a rising stock market, more donors are electing to utilize a DAF to dedicate appreciated assets to charity, while avoiding capital gains. By contributing non-cash assets that have been held for more than a year, rather than selling the assets and donating the proceeds, individuals can potentially increase the amount available for charity by up to 20%. Schwab Charitable reports that stock transfers now represent 74% of all contributions to donor advised funds held by the firm and, during the last fiscal year, 50% of existing DAF account holders made additional contributions to their Fund.

At Rodman & Associates, our mission is to support individuals, families, companies and nonprofits in finding ways to engage in more effective philanthropy. Let us help you, your clients and your donors identify and achieve these philanthropic goals. Together, we truly can make the world a better place.

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