Discussing Charitable Giving with Your ClientsA sometimes sensitive subject, charitable giving is still usually a major benefit to your clients' bottom line – and heart.
Start the Conversation
Your clients, however, may not be considering philanthropy when they come for an appointment with you, even if it’s to their advantage. And some professional advisors have told us they’re reluctant to raise the issue.
For most of your clients, philanthropy is an important part of their lives—they may give to their alma mater, faith community and to local, national and even international charities. Many may also value volunteering in our community in hands-on roles or as board members.
But when they meet with you, they are primarily focused on gaining your expertise to protect and extend their assets and you are focused on providing that. What if you could help your clients set philanthropic goals while still protecting their assets?
How do you invite a conversation about philanthropy with your clients? Here are a number of scenarios when charitable giving can play a key role:
Year-end tax planning
Your client just earned a large bonus and wants to give a portion back to the community, but has no time to decide on the most deserving charities. Recommend establishing a donor advised fund through the Foundation for an immediate tax deduction, and the ability to stay involved in recommending uses for the gift for years to come.
Preserving an estate
Estate planning identifies significant taxes going to the IRS, but your client wants to direct dollars for local benefit. The Foundation can work with you and your client to reduce her taxable estate through a charitable bequest or other planned gift. Your client’s gift will create a legacy of caring in the community that stays true to her charitable intent forever.
Retiring in comfort
Your client is concerned about running out of money during her lifetime, but has always been charitable. Recommend establishing a life income gift (such as a charitable remainder trust) at the Foundation that pays income potentially for life. Upon your client’s death, the gift can be distributed by the Foundation in accordance with her charitable interests.
Establishing a private foundation
Your client is thinking about establishing a private foundation, but is looking for a simpler, more cost-efficient alternative. The Foundation can help you and your client analyze the pros and cons of creating a donor advised fund or a private foundation.
Closely held stock
Your client’s personal net worth is primarily tied up in a closely held company, but it’s important for her to give back to the community. Recommend establishing a donor advised fund or planned gift; your client is eligible for a tax deduction measured by the fair market value of appreciated stock (less any planned gift value).
Sale or disposition of highly appreciated stock
Your client has appreciated stock and wants to use a portion of the gains for charitable giving, but the identified charities are too small to accept direct stock gifts. Suggest establishing a fund at the Foundation with a gift of appreciated stock. Your client receives a tax deduction on the full market value, while avoiding the capital gains tax that would otherwise arise from sale of the stock. Your client can even be involved in recommending uses for the gift, including the organizations and programs she cares about most.
Sale of a business
Your client owns highly appreciated stock in a company that is about to be acquired. The Foundation can work with you to suggest several ways to structure a charitable gift (including the use of planned giving techniques) to help your client reduce capital gains tax and maximize impact to the community.
Your client is passionate about helping meet a specific community need and wants to make a meaningful gift. You and your client can work with our grantmaking experts to understand community needs and programs and then direct gift dollars to make the greatest impact.
Substantial IRA/401(k) assets
Your client wants to leave her estate to community and family, and has substantial assets in retirement accounts. The Foundation can help you and your client evaluate the most beneficial asset distribution to minimize taxes, giving more to her heirs and preserving charitable intent.
Want to hear a story? We’d love to tell you more about our donors and the good works their gifts make possible.
Read about our Financial Advisor Program to learn more and let’s talk! Contact us today.
530.885.4920 | firstname.lastname@example.org