Charitable giving is not always at the top of an advisor’s list of subjects. However, as things in the world grow increasingly unpredictable, more advisors are choosing to have charitable planning conversations with clients and prospects – and these potential donors are open to hearing what they have to say.
Clients may seek the advice of advisors when changes to tax laws and market downturns make them question if – or how – they should give. Some may want to know about donating different assets, like closely held stock or cryptocurrency, while others might be interested in a donor-advised fund (DAF) as a tax-efficient, easy-to-use charitable vehicle.
Advisors can show tremendous foresight by proactively engaging their clients and prospects in charitable giving conversations. If they ask the right questions, the discussion will be helpful to the donors, the charities and causes they support, and their new or ongoing relationship with their advisor.
14 Questions to Start or Continue the Conversation About Philanthropy
Many questions that advisors ask their clients about philanthropy are eternally relevant, but others change over time. Here are core questions advisors can use to kick off the conversation – or keep it going:
- Are you involved with any charities now as a board member, donor, or volunteer?
- Which charities or causes are most important to you?
- Have you recently changed, or considered changing, the amount you donate to charity?
- Do you feel you will become more involved in donating to charities over time?
- Do you intend to do the bulk of your giving during or after your lifetime? Have you considered bequests to charities or DAFs upon death?
- If you intend to donate after death, who will make the decisions about where to give?
- Are you planning to donate from a pre-tax retirement account to minimize your taxes?
- Is having a charitable legacy important to you?
- Do you wish to involve your children, relatives, or others in the charitable giving decision-making process?
- How do you decide how to give each year (i.e., how much, which assets, what time, which charities)?
- Do you prefer to donate publicly or anonymously?
- Do you support a few big organizations or many small charities?
- Do you have any frustrations or concerns with the giving process, or are you generally satisfied when you reflect on your donations?
- Have you established any charitable vehicles, like a DAF or private foundation? If so, when? How is it working for you?
Most high-net-worth (HNW) clients are active donors, so this conversation will likely come up comfortably and naturally – and it can enable them to have a greater impact on the causes and charities that are important to them.
Though tax benefits are not the main reason to give, clients want to learn how they can donate efficiently, allowing them to give more and pay less in taxes. Keeping the conversation alive also provides opportunities to involve their family, helping you engage the next generation of donors to keep the relationship going.
Engaging in Charitable Planning Sets Advisors Apart
An increasing number of advisors are discussing philanthropy with their clients, but it can still be a differentiating factor. If one advisor doesn’t talk about charitable giving, another will. Most clients are excited to talk about the charities and non-profit organizations for which they’re passionate, especially when the conversation can enable them to donate more and get the maximum tax benefit.
Start the Conversation Early – and Keep It Going
There’s no wrong time to talk about philanthropy – and the conversation is ongoing. Changes in a client’s financial situation or interests, along with current events, can impact their ability and desire to give. Though it may be tempting to save the talk for Giving Season (October, November and December), clients often wonder if they should donate early in the year to have a greater impact on the organizations they support.
Conversations that start early and continue throughout the year will often lead to greater client satisfaction and a sense of accomplishment. After all, giving doesn’t have to wait until the end of the year. Charities need support in every season.
Questions About DAFs? We Can Help.
If you or your client has questions about how DAFs can support their charitable giving, American Endowment Foundation (AEF) is here to talk. Reach out to AEF today, and we’ll help you keep the conversation going.
NOTE: An earlier version of this article appeared in Financial Advisor.