By Ken Nopar, VP-Senior Philanthropic Advisor

This article originally appeared in AdvisorPerspectives.

As year-end approaches, many clients are contributing to their already-established charitable vehicles, while others are rushing to establish them. Many clients with donor advised fund (DAF) accounts have already recommended grants to their favorite charities earlier in the year, and some are responding to year-end appeals and are making additional grants. This will be a record year both for incoming donations to DAF sponsors as well as outgoing grants from them to thousands of charities.

DonateThough most clients, regardless of whether they have a DAF, private foundation, or no charitable vehicle, have a good idea of which causes and non-profit organizations they wish to support, some do not. Those who do not often recently sold their business, retired, or received an inheritance, while others are simply reassessing their charitable plans. The pandemic has caused some donors to change direction or contemplate how they can have the most impact. Some donors have realized how fortunate they are and with their investment portfolios at much higher levels than ever before, they are determined to share their good fortune.

The need for content and guidance in the past few years has been greater than ever before, as clients realize that establishing a charitable vehicle is only step one in achieving their charitable goals. Only some banks and wealth management firms offer philanthropic guidance to clients, but fortunately there are independent philanthropic advisory firms that can help clients and complement the work of the clients’ financial, tax, and legal advisors.

These philanthropic advisory firms help donors in one or more of the following areas. They can help clients:

  1. Develop a charitable mission
  2. Establish a grant making strategy
  3. Narrow or determine which causes to support
  4. Identify or evaluate the best non-profit organizations in geographic or issue areas
  5. Involve the next generation
  6. Facilitate family meetings about philanthropy
  7. Assess progress
  8. Evaluate impact
  9. Manage charitable giving
  10. Advise or coach donors

These firms work with clients on an ongoing basis, or just at a point in time to help get them headed in the right direction. Some clients just need help getting started and want to manage their giving themselves, while other clients need these firms to do much of the work including sending out requests for proposals, reviewing them, conducting site visits, and evaluating the impact of their gifts.

Many types of donors work with philanthropic advisors. These include donors who:

  1. Have sold or will soon sell their businesses
  2. Have or will soon receive an inheritance
  3. Were never actively involved with their parents’ DAF or private foundation
  4. Are divorced or widowed and now have control over assets to give away
  5. Are older and want to plan before it is too late
  6. Have young families and want to establish a plan early since charitable assets will grow
  7. Have a family office that does not have any internal charitable expertise
  8. Need outside firm to navigate internal family dynamics and possible divergent charitable paths
  9. Need a firm to protect their privacy while giving away money
  10. Own businesses and are creating charitable plan for the firm

Philanthropy is very important to so many clients, yet relatively few know that there are firms available to help them in their charitable journey. They are aware of the importance and impact of their financial, tax, and legal advisors, yet some are not aware that philanthropic advisors can help shore up the fourth leg of the family’s charitable planning table.

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.