Questions to Ask Clients or Prospects About Their Charitable Giving

By Ken Nopar, VP-Senior Philanthropic Advisor

_{This article has appeared previously in Financial Advisor.}

In recent years, advisors have discussed charitable planning with clients more frequently than ever before. The COVID pandemic has caused many wealthy clients to increase their giving as charities are in greater need of support, while at the same time, the clients’ investment portfolios have grown substantially.

Clients have sought the advice of their advisors because tax law changes and proposals make them question whether there is a better way to give. Additionally, they learn that different assets like cryptocurrency or closely-held stock can be donated, and donor advised funds have greatly increased in popularity. At the same time, more advisors are proactively engaging their clients and prospects in the charitable conversation since they know that the discussion is helpful to the clients, the charities they support, and to their new or ongoing relationship.

Though many of the questions that advisors can ask have remained the same over the years, others have changed. Clients understand that these are necessary so their advisor can give them the best guidance. Here are some questions to help advisors begin the conversation:

1. Are you involved with any charities now as a board member, donor, or volunteer?
2. Because of the pandemic, have you changed how much or where you’ve given? 
3. Which charities or causes are most important to you at this point?
4. Looking forward, do you feel that you will become more or less involved or change the amount that you will donate to charities?
5. Do you intend to do the bulk of your giving during your lifetime, in bequests to charities or a charitable vehicle upon your death, or for many years after death? If after death, who will make the decisions about where to give?
6. Are you planning on making donations from your retirement accounts during your lifetime or upon death to minimize or avoid taxes?
7. Is a charitable legacy important to you?
8. Who is involved in making the charitable giving decisions now? Have you included your children or others or do you plan on doing so?
9. How do you decide how much to give each year, which assets to give, at what time of year to give, or which charities to support?
10. Do you prefer to give publicly or anonymously? To big organizations or small? To many charities or just a few?
11. Do you always feel satisfied and pleased as you reflect upon your giving, or are there any frustrations or concerns with the giving process?
12. Have you established any charitable vehicles such as a private foundation or donor-advised fund (DAF)? Did you set these up recently? Are these working well for you or do you have any concerns with them? How are these assets invested?

Because nearly all high net worth clients are active donors, the conversation is very comfortable and natural and will often enable clients to have a greater impact on the causes and charities that are most important to them. Though the tax benefits are not the main reason they give, clients also want to learn how they can donate most efficiently so they can give more and pay fewer taxes.

Many advisors have learned that talking about charitable planning can be a differentiator from other advisors, and if they do not talk about it, another advisor will. Clients are glad to talk since they are often passionate about their giving and involvement with non-profit organizations, and especially when they understand that the conversation will enable their advisors to provide them with the best possible legal, investment, and tax advice. 

Since the world changes rapidly and clients’ interests also change, this discussion should take place on a regular basis. Though the temptation may be to talk during the peak giving season of November and December, that is often too late in the year to make meaningful changes. Earlier conversations will lead to greater client satisfaction and accomplishment, and the charities the clients support will also greatly appreciate donations earlier in the year.

At American Endowment Foundation, we look forward to helping donors and advisors determine the best strategies for their charitable giving. Please contact us or call at 1-888-966-8170 with any questions.