Wealth Advisors are Missing Opportunities if They’re Not Talking Philanthropy

I have discussed the opportunities to add philanthropy to your practice often in this blog, but I usually discuss it in the terms of client engagement (and even as a growth or marketing opportunity).  Our own tax expert Dean Mioli has shared some of the technical aspects of tax planning around charitable giving, but I realized after reading a blog by Karen Robinson from Geneva Global that we haven’t really addressed the emotional and impactful side of gifting – many times, we talk about the “how” but not about the “why” in philanthropy with clients.

For some of your wealthier clients with charitable intentions, maybe philanthropic advisor would be a meaningful addition to your strategic partners.  Please enjoy Karen’s guest blog post below.

As I speak with wealth advisors who are providing investment and financial planning services to their high-net-worth clients, a recurring theme keeps coming up. As the anticipated wealth transfer is starting and clients think about their legacy, they are asking questions that go beyond “Which is the right giving vehicle for me?”

It’s important that clients receive the tax, legal and structural advice that they need to set up their giving. But then what? Too often, I see that everyone just moves on after a donor-advised fund, charitable trust or family foundation has been set up.

Mission accomplished?

Did anyone decide where the funds are going to go and what they are intended to achieve?

Opportunity for added support

It’s not that unusual for individuals and families to get stuck in neutral once their giving vehicle is structured and funded.

Some of the challenges that donors face include:

  • Getting overwhelmed by requests for their friends’ favorite causes
  • Wanting to understand how their gift is going to make a difference – the type of difference that is important to them
  • Knowing if their donations are being used properly
  • Learning more about an issue and finding the best organizations that are working on that issue

This is an opportunity for wealth managers to give added support to their clients. You know your clients well and have worked tirelessly to help them develop a comprehensive wealth plan. It makes sense that you would want the assets that you’ve helped your clients generate be used with as much impact as possible.

Therefore, it’s a natural step to discuss a strategy and plan for your clients’ philanthropic funds. Yet many wealth managers hold back from having these discussions because they don’t feel they know how to begin this conversation, or they don’t have the depth of knowledge to provide the right advice.

That’s where partnering with a philanthropic advisor can help. Philanthropic advisors help in those conversations—whether it’s by arming you with the right training and resources you need, or by working with your client alongside you as one of your trusted partners.

Encouraging your clients to build a plan for their philanthropic endeavors — and providing support for their activities — offers the following benefits:

Philanthropy provides an opportunity for families to engage in meaningful ways and has multiple benefits.

Family dynamics can often be complicated, especially for wealthy families. Philanthropy can be a great tool to bridge communication gaps. Your client can bring in their children and grandchildren to be part of the philanthropy discussions and activities. It is an opportunity to educate and instill family values. It can be the door opener that then eases the younger family members into the bigger conversations about other family wealth matters.

And it’s not only the younger generation who benefits from these cross-generational conversations. These days, millennials are often the ones educating their older relatives on impact investing and other ways to support and create social impact.

It reassures your clients about the quality of the organizations they’re supporting.

We hear often that clients want to know how to evaluate a charitable organization. There are sites like GiveWell and Charity Navigator that are available, but these have limitations. The information often doesn’t provide the level of program detail that some donors are interested in, and it’s difficult to do an apples-to-apples comparison of similar projects run by different nonprofits.

Clients also need help sifting through the multitude of organizations that are doing work in their interest area in order to figure out which ones are making the greatest impact.

Philanthropic advisors can help you alleviate some of your clients’ concerns:

  • What will happen to the funds I give?
  • How do I know that the organization is doing good work?
  • What risks could the organization face that could prevent them from achieving their goals?

These are all good questions that can be answered with a thorough evaluation of a charity.

Clients understand their impact.

With a proper strategy in place, there is an opportunity at the outset to help clients structure gifts to be used in the way they intend. As clients become more thoughtful and strategic donors, it also improves the type of dialogue they have with the organizations they support, giving them more transparency into how their money was used. That evidence of their impact often leads to a more meaningful experience for donors. And helping them have a great experience ultimately benefits you.

It gives your client the ability to fend off requests from others.

A great benefit to having a family philanthropic plan is that it provides the client with a truthful response to all the donation requests from friends, distant family members, neighbors, and so on.

Imagine how much better your client will feel being able to say to their friend, “I am sure this is a wonderful organization doing great work, but as a family we have created a plan for our philanthropy and we make all of our giving decisions annually.” Or “As a family, we are focusing our philanthropy on XYZ cause this year as a tribute to our late father.”

If you’re not talking to your clients about their philanthropy, you’re missing out on opportunities. With the help of a philanthropic advisor, you can encourage clients to make and implement plans for their charitable funds.

Your clients deserve to feel great about their giving, understand their impact, and enjoy the opportunity to get involved in the issues that are important to them.

Karen Robinson is the CFO & COO, Geneva Global, a philanthropic advisory firm located in Paoli, PA. To learn more about Geneva Global, please visit their website or contact them. This post was originally published on Geneva Global’s blog in 2017.

The opinions and views expressed herein are those of Karen Robinson. Karen Robinson and Geneva Global are not affiliated with SEI or its subsidiaries. SEI cannot guarantee the accuracy or completeness of the information and assumes no responsibility or liability for its incompleteness or inaccuracy.

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John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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