This article originally appeared in Financial Advisor, November 15, 2019.
By Ken Nopar, Senior Philanthropic Advisor
The philanthropic advisory (PA) industry has grown over the past decade. Though most donors feel that they do a decent job in planning, executing and achieving their charitable goals, others realize that professionals can help them in their quest.
However, many donors do not even know that the industry exists or where to turn for help, so their attorneys or financial advisors are often the ones to make the introductions. This generally occurs when their clients have had a liquidity event and they want to be more strategic with their giving, or when families have been active donors but are frustrated or are not feeling a great deal of satisfaction from their efforts.
Most of the donors and their advisors who have established donor advised fund (DAF) accounts at American Endowment Foundation do not ask for help in developing a mission, identifying causes or charities to support, facilitating a family conference about philanthropy or other areas, but AEF is pleased to help its donors by sharing helpful content or introducing donors or their advisors to these PA firms when there is a need.
In order to help professional advisors better understand when other financial, legal and tax advisors have referred their clients to PA firms, we have asked some of the country’s leading philanthropic advisors to share situations in which these referrals have occurred:
1. “A financial advisor reached out to me about a three-generation family that had sold a business, creating a new DAF. They asked me to facilitate a conversation on shared principles and shared definitions of ‘good grants’ and ‘impact,’ and by leading a session with the 3rd generation on effective giving and volunteering with nonprofits. I produced a summary report and recommended other materials for them to continue the next steps of implementation.” Tony Macklin, Tony Macklin Consulting
2. “A financial advisor recognized that a single woman, in her 60’s, without heirs, and with wealth beyond her needs could benefit from meaningful, engaged philanthropy in her life. Once her philanthropic capacity was determined, she was referred to us for engagement in strategic philanthropy involving not only her financial resources, but her volunteer time and skills as well. The process has added joy, meaning and purpose to her life.” Bruce DeBoskey, The DeBoskey Group
3. “An estate planning attorney serving UHNW families approached us about a client who was recently widowed and left with a very large estate. The widow was in her 70s and needed to do significant charitable giving. She had never made a donation larger than $10,000. We led the client to discover her charitable goals, present giving opportunities and celebrate the results. The attorney immediately saw a change in the client’s countenance—philanthropy had given her purpose and joy. Nearly 10 years later, we are still part of the client’s ‘team’ of advisors and work closely with the attorney, accountants and financial advisor.” Jessica Bocker, Excellence in Giving LLC
4. “An accounting firm had a client who had recently sold his business and established a family office. The family had never been too involved in philanthropy and needed help getting started on their philanthropic journey. I was asked to meet with the couple first and then the entire family. We discussed what family wealth meant to them, their purpose as a family and their values. This conversation and experience involved everyone and helped to provide a basis for a giving strategy for engaging the entire family.” Colleen Mitchell, Venture3Philanthropy
5. “A wealth management firm contacted me to help their client who was creating a private foundation. Their attorney set up the foundation, but their clients’ needs exceeded their own expertise and needed help in answering such questions as: Whether and how to involve their children, at what point should the foundation be publicly ‘launched,’ how to prepare for greater exposure and awareness about their wealth once the foundation was launched, and who to find and build relationships with grantees. This family also set up a complementary DAF so we discussed which vehicle should be used for what purpose.” Kris Putnam-Walkerly, Putnam Consulting Group
6. “A couple with no children opened up a DAF upon the sale of their family business. They are interested in supporting veterans and the environment but do not have any specific organizations in mind. They would like to establish a mission for their philanthropic capital prior to engaging their nieces and nephews as successors in their DAF as part of a family charitable legacy. The wealth advisor recognized that their client will need help with all three key areas of mission, grant making and legacy planning, and that a philanthropic advisor would be the solution to helping them think about and execute all three.” John LaFleur, Strategic Philanthropy Ltd
7. “Recently, we were brought in by an advisor to help a growing family foundation. Family members had been fairly reactive in their giving, but wanted to be more intentional and have a greater impact as their foundation was set to more than double in size. We were asked to help family members work together to set a clear vision for the foundation, determine where they focused their grant making, and articulate the desired impact. Just as important was creating a structure that would last across generations and bring the family together.” Melinda McAliney, Vario Philanthropy
These are just some of the situations in which advisors have brought in PA firms to complement their work and help their clients. Other examples include: (1) donors who are young and involved in their successful careers but don’t have the time to put a plan together and establish a baseline; (2) heirs who, to their surprise, became the successor advisors to their parents’ DAF or foundation that they knew nothing about; (3) family members who disagreed on the causes the charitable vehicle supported.
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.