By Ken Nopar
Recently, an advisor mentioned that one of his clients wanted to have a charitable planning conversation with their family over the holidays, and asked if I had a list of questions he could share with them. Not knowing the family or their goals, I suggested the general questions below to help start the conversation.
Because many families have created donor advised fund (DAF) accounts (or have made additional donations into their already-established DAF accounts this year), this would be an ideal time for families to be thoughtful and proactive about their future charitable giving.
When possible, advisors should be part of the discussion, but some families want to initially have this conversation on their own. Like the instance above, some may want to talk with their families while they are all together.
Each situation is different, but many of these questions can be helpful in creating greater family awareness, understanding, purpose, and unity.
- Why is philanthropy important to our family?
- What is the history of philanthropy in our family? Who has been involved as a volunteer, donor, or has worked in the non-profit sector?
- How involved do we want to be with our giving? Should we volunteer, serve on a board, go on a site visit, attend conferences, collaborate with other donors, or just send in donations?
- Which causes and charities are most important to each of us, and why? Should we create a charitable giving mission?
- Are there new areas of interest to anyone in the family?
- Do we want our giving to be concentrated in the near future, throughout our lifetimes, or for generations to come?
- Who wants to be involved, now and later? Who will be in charge of family giving in the future?
- Do we want to support many or few charities, large or small ones?
- Do we want to be public or private with our giving?
- Should we plan and manage our giving ourselves, or would it be helpful to bring in charitable giving experts to help?
- Are there particular assets that we own that nobody will want in the future that can be donated to a charity or donor advised fund account? Once donated and sold, how can that that be used as basis for our giving in the future?
- How should we decide how much to give, and when should we discuss with our financial advisor and CPA so we get the maximum tax benefits?
- Which past donations have provided us with the greatest satisfaction or regret?
- Are there any charitable beneficiaries named in the estate plan? Shall we include some?
- Is a charitable legacy important to us?
- Does the family have any charitable vehicles currently, and are there any challenges with them? Are there simpler and less expensive options such as donor advised funds?
- Are we, or should we donate the Required Minimum Distributions (RMDs) from our IRA to charity rather than pay taxes on the RMDs?
- Are we fully aware of the advantages of donating assets other than cash?
- What concerns does anyone have about our charitable giving?
- What are the benefits and impact of our giving?
Usually, these initial conversations will generate positive feelings and direction. If there is little agreement or understanding about how to proceed, advisors can often step in to help. When there has been a liquidity event and the family is just getting started on their philanthropic journey, or the family’s philanthropic efforts have been stuck in neutral or reverse for some time, an outside philanthropic advisory firm can be brought in to work with the family or help complement the work of the family’s professional advisors.
The benefits of a positive and productive charitable planning conversation are numerous to the clients, their advisors, and the charities they wish to support. Whether they participate in the conversation themselves or just encourage clients to engage their families and ask some of these pertinent questions, advisors can play a key role.
At American Endowment Foundation, we look forward to discussing the myriad ways that a donor advised fund can help families answer some of their charitable giving concerns. Contact us or call at 1-888-660-4508 to learn more.