Using Schwab Charitable to maximize the impact of philanthropy
As chief operating officer and a member of the executive committee at the San Francisco-based registered investment advisor Aspiriant, Michael Kossman understands the philanthropic motivations of his firm's clients. Recently, he discussed how his firm integrates philanthropy into its wealth management strategies with Schwab Charitable. His comments to InvestmentNews Content Strategy Studio appear in edited form below:
InvestmentNews Content Strategy Studio: Tell us about the work you do at Aspiriant and the role of charitable giving in that work.
Michael Kossman: At its core, the RIA business is really about helping people make good decisions that enrich their lives. Of course, that can mean many different things. At our firm, we do financial planning and provide investment advice to help clients grow their financial resources to the point where they can achieve their goals. I always feel really good about that, especially in the many frequent cases when those goals include charitable giving.
InvestmentNews Content Strategy Studio: What happens when charitable giving becomes part of the conversation with you and your clients?
Michael Kossman: Once we start talking about charitable giving, our clients become excited because they realize they can make an even greater impact through their generosity. With a thoughtful giving strategy, they can affect the lives of people in their community and even the entire world in a very positive way. And when they involve their families in their charitable decisions, they can extend a legacy of giving. Our discussions of giving strategies typically include the benefits of using Schwab Charitable, such as being able to donate appreciated assets or investments. All of the benefits aren't necessarily commonplace, so our conversations really provide a lot of value to clients.
InvestmentNews Content Strategy Studio: How does Schwab Charitable help your clients with their giving?
Michael Kossman: Since Schwab Charitable offers a donor-advised fund, it was created to manage charitable donations of individuals, families and organizations. Our clients can open an account in the fund with cash, appreciated securities or other financial instruments, and then advise Schwab Charitable on how to invest and grant the assets in the account.
The simplicity of execution is one of the great values of Schwab Charitable. If a client mentions that they want to give, say, $20,000 to the same charity they contributed to last year, we can make a note of that and execute on it by scheduling a recurring grant for them. It makes their lives that much easier.
InvestmentNews Content Strategy Studio: Can you give a specific example of what one client did?
Michael Kossman: One of our clients wanted to help make a difference to an organization that was important to her and which supports HIV/Awareness, environmental efforts and programs surrounding domestic violence. She used her donor-advised fund account at Schwab Charitable to recommend grants to the group. The process was easy, all the paperwork and record keeping was taken care of, and our client is delighted that she was able to make an impact in a way that is important to her.
InvestmentNews Content Strategy Studio: You say that the process was easy. How does Schwab Charitable help advisory firms?
Michael Kossman: As our firm's COO, I appreciate efficient and effective processes. Schwab Charitable has helped on really important practice management pieces with donor-advised fund accounts and charitable situations when we've had a particularly unusual situation with a client. For example, there was a case when a client, an insider at a publicly held company, wanted to contribute appreciated, restricted shares to a donor-advised fund account. This was a complicated transaction, and Schwab Charitable was very helpful in getting it done.
InvestmentNews Content Strategy Studio: Any other positive experiences with Schwab Charitable?
Michael Kossman: Yes, my own. I have a donor-advised fund account and think the technology and the ability to find and research charities is great. If you want to have a conversation with somebody about your charitable goals, Schwab Charitable can help facilitate that conversation. And something that has been really helpful for me is the annual contribution reporting that comes out in time for tax season. I can see all my charitable tax receipts in one place, which makes it easier to complete my taxes.
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