Helping Your Clients Get Organized
Instilling the idea of charitable giving in children and grandchildren at first blush may appear to be easy, but where to begin, and how to make it ongoing? More and more, wealth advisors are being asked by their clients to weigh in on strategies for fostering a family’s financial values, which frequently include charitable giving traditions.
An important first step in creating any multi-generational philanthropy plan is to advise clients to consider organizing their charitable giving. A family Donor Advised Fund at CFHZ is one good option.
The process of organizing charitable giving itself creates much-needed clarity around the family’s philanthropic purpose. This is because without an organized approach to family giving, it is easy for children and grandchildren to get confused about their parents’ and grandparents’ processes for making decisions about which nonprofits to support.
Consider This Scenario:
A local entrepreneur spent years making charitable gifts to human service organizations. She wanted to strengthen the community that had been a big part of making her business so successful. Upon the sale of her company, the entrepreneur formed a family donor-advised fund. This process helped her to facilitate a conversation with her children about her giving priorities, and her desire for them to join her in supporting the organizations that were close to her heart, while also adding causes/organizations that her children felt called to support.
DAFs and Multi-Generational Giving
Establishing a fund at CFHZ can be a very effective solution for many of your clients who are launching a multi-generational giving strategy.
- Community foundation vehicles are extremely flexible and can be used to engage an extended family in the process of charitable giving. Donor-advised funds, for example, are popular because they allow your client to name children and grandchildren as successor advisors.
- When your client organizes charitable giving through a community foundation fund, the client can make a large transfer of cash or marketable securities that is immediately eligible for a charitable deduction. Your client then can recommend gifts to favorite charities from the fund when the time is right. This is especially useful in the case of clients who sell a business or for another reason experience a large influx of taxable income in a single tax year.
- Establishing a donor-advised fund at the community foundation can be a much better choice for your family-oriented clients than a donor-advised fund offered through a brokerage firm (such as Fidelity or Schwab). That’s because, at CFHZ, your clients, as well as their children and grandchildren, are part of a community of giving and have opportunities to collaborate with other donors who share similar interests.
- The community foundation can work with a client and the client’s family on a charitable giving plan that extends for multiple future generations. That is because the experienced team at the community foundation supports strategic grant making, family philanthropy, and opportunities to gain deep knowledge about local issues and nonprofits making a difference.
- Finally, CFHZ’s tools and resources make it much easier for families to communicate across generations about the family’s charitable giving purpose and goals for long-term impact.
We welcome the opportunity to work with you and any of your philanthropic clients to establish an enduring and rewarding family philanthropy program that is customized to meet each client’s unique purpose!
We always encourage donors to first seek the advice of their legal, financial, or tax advisors when considering a gift of non-cash assets. While our team does not offer tax advice, we stay knowledgeable on charitable giving strategies. Please contact Colleen Hill, Vice President of Development & Donor Services, at chill@cfhz.org or by calling 616–994–8853 if we can help you serve your clients.
