Giving gains traction – and closes in on 2007 record

Charitable donations seen as a win for clients and advisers

Jun 17, 2014 @ 11:45 am

By Alessandra Malito

Charitable giving, clients, advisers, Schwab Charitable, donor-advised funds
+ Zoom

Every Thanksgiving, Bert Whitehead, a financial planner of 42 years and president of Cambridge Connection in Franklin, Mich., and his family sit around the dinner table and one by one name a charity they want to give to and why. Then they go over to the computer and plug in the names of those charities to make donations.

He's been doing this for years – and now dozens of his clients do too.

“It's a great way of passing your values down to your children,” Mr. Whitehead said. “You're telling what charities you're supporting and why, and then they tell you what they're giving to.”

One of his clients told him that when their oldest daughter was away from home one Thanksgiving, she called in to tell what she wanted her charity to be so she wouldn't miss out.

It turns out, like Mr. Whitehead and his family, more people are giving. According to the Giving USA annual report, total charitable giving increased by 4.4% to $335.17 billion in 2013, including a rise of 4.2% in giving from individuals. The single largest influence on this increase was the additional $9.69 billion in gifts made by individuals over 2012.


The difference between Mr. Whitehead and others, though, may be the fact that he sees charitable giving from a financial planning perspective.

“People are really concerned how they're going to pass their money and their values onto their children,” Mr. Whitehead said.

As a response to his clients' concert about passing on their money and value, Mr. Whitehead works a lot with donor-advised funds, or DAFs, in which an investor can receive an immediate tax benefit from the amount they want to donate but be able to recommend grants to the charities of their choice over time. That's just one of the tools a financial adviser can use, according to Rick Brooks, vice president of investment management at Blankinship & Foster in Solana Beach, Calif.

“The adviser's role is to find out what the client wants to achieve and then look through their toolbox to see which of their available tools will get the job done best,” Mr. Brooks said. “It's really up to the adviser to get it done.”

Mr. Brooks also has a unique dual perspective, having a point of view from a financial adviser's standpoint and one from a charity. He is the chair of the investment committee at Girl Scouts San Diego, and sits on the executive committee.

“From the charities' perspectives, they're always looking for more and they don't particularly care how and what they receive,” Mr. Brooks said. “I think most clients don't really think to coordinate with the charity as to how they should be gifting. Most clients will just write a check or drop $50 in the collection jar.”


According to the Giving USA annual report, 72% of contributions in 2013 were given by individuals. Of all the 2013 contributions, 31% were given to a religious organization, followed by education with 16%. Other organizations included human services, health, public-society benefit, arts and culture, international affairs and the environment and animals.

For Thomas Cloud, Jr., chief steward of Eleven Two Fund Management in Marrietta, Ga., about half of his clients are Christian and always find it important to donate to their church, the poor, widows and orphans.

“Their interpretation [of the Bible] is that God wanted them to give to people who are in need, poor people, widows and orphans,” Mr. Cloud said.

In one case, one of his clients' husband died and she was left with hundreds of thousands of dollars. She said she wanted to give $30,000 to her church, and did.

“In that situation, it was great because I was able to understand where she was coming from and how important it was to her,” Mr. Cloud said. “My role in it is to not step in and question it or say that it's unwise or stupid. I think most advisers have moved away from that. I think my role is to encourage them.”

In instances when his clients are not as wealthy but still want to give money to their church, he finds that it's better not to tell them they can't do it, but rather suggest the best way to do so in line with their financial situation.

“Sometimes I have to put it in the context in that particular situation, you want to focus on the percentage and not the number,” Mr. Cloud said.

In 2013, giving by U.S. adults reached $1,016 per capita on average and $2,974 by U.S. household on average. In the last decade, total giving has increased by $34.60 billion in inflation-adjusted dollars and if it keeps up at this inflation-adjusted rate, the U.S. could see a return to its peak level of giving in 2007.

“Personally I love working in that area [of charitable giving] because you see people transform when they start to give,” said Kim Tillotson, chairman and chief executive of Hefren-Tilltson in Pittsburgh, Pa. “They're doing something good, meaningful.”

Ms. Tillotson worked with one client who began giving in small amounts.

“She enjoyed it so much and got so much reward from it, she stepped up to what she was able to give, which was five times what she was able to give the year before,” Ms. Tillotson said. “I would say it was life changing for her in ways. I was able to show her how her assets had grown.”

For advisers, helping a client work toward more meaningful philanthropy can drive a higher level of personal satisfaction.

“Additionally, that added value is going to produce a positive impact to the advisers' business. And all of this together is going to bring more and more thoughtful philanthropic capital to society,” Jim Coutre, a partner at The Philanthropic Initiative, said.

“We like to think of it like the triple win,” he said. “A win for the client, a win for the adviser and a win for society.”


What do you think?

View comments

Recommended for you

Latest news & opinion

Trump is gutting rules that Corporate America hates

With executive orders, bureaucratic actions and unprecedented use of an obscure statute, the administration has killed or postponed dozens of regulations.

Wells Fargo Advisors restricting investments for retirement accounts

Mutual fund sales will be limited to T shares, while municipal bonds, preferred stock and international debt will be prohibited.

Investments that advisers should look at in an overheated market

Cash, alternatives, international all beckon, but all have pros and cons.

Morgan Stanley joins competitors in cutting back on recruiting

Wirehouse said it intends to increase its investment in existing talent.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print