The season of giving is upon us. Time for advisors to review their charitable giving checklists.
There are two ways to approach charitable donations, according to Helen Andreoli, managing partner at Great Diamond Partners, and the proper choice depends on the client. In her view, some clients are already charitably inclined so the initial discussion is more a matter of how much they can give and what’s the best way to facilitate the gift. For others, she says it’s about their tax liability and what options they have to minimize that expense.
“In the fall, we take the time to review all our clients’ gain/loss situations as well their year-to-date and projected income. In collaboration with their CPA, we can help provide an estimate of what their tax situation will look like for the year. This naturally leads to a conversation about funding a donor advised fund (DAF) or other charitable giving options,” Andreoli said.
Phil Matalucci, certified financial planner at Amplius Wealth, says he likes to start by asking the client “what matters most” to them and their family.
“It’s a simple question, but it gets to the heart of what drives people, and that’s where meaningful conversations about giving and legacy can take shape,” Matalucci said.
As he approaches year-end, Matalucci said his client checklist typically focuses on tax and estate planning, as well as a thorough investment review, and an update on client savings goals.
“Charitable giving is an important piece of that process because it can create meaningful impact while also providing potential tax benefits,” Matalucci said.
In terms of trends advisors are seeing this year in how clients choose to give, Andreoli says most clients do a combination of DAF contributions and direct charitable gifts. In her experience, some clients prefer to write the check themselves as they enjoy the “feeling” of giving versus an electronic check from a DAF.
“I’m having more conversations with clients about the high balances in their DAFs and how they can best get that money out into the community,” Andreoli said.
Along similar lines, Paul Simons, CEO of PUREfi, says that with markets continuing to press new highs, the appeal of equity-funded philanthropy is on the rise as well.
“Private foundations, donor advised funds, charitable lead and remainder trusts are common approaches,” Simons said.
It's not just a matter of simply giving the money away. Advisors say there are two primary challenges when it comes to creating a giving plan. The first is helping the client understand what they can afford to give. The other is helping the client find an organization that really fits their goals.
“Often, clients are uncertain about giving because they just don’t know or understand the giving landscape. We help them by engaging with the charities so we can better understand their missions and success metrics,” Andreoli said.
Matalucci, meanwhile, says the typical challenge his clients face is narrowing down the right cause, or the one that truly resonates with them the most.
“As their advisor, our role is to help connect their giving to their values, and put together a sound wealth plan that turns their generosity into meaningful, lasting impact,” Matalucci said.
Advisors also point out that the giving spirit is not just on the client side of the table. Amplius’ Matalucci says his firm participates in numerous causes throughout the year, but the intensity and commitment certainly rises in the fourth quarter.
“The holidays provide the perfect opportunity for us to come together as a firm and give back to those in need,” Matalucci said.
PureFi’s Paul Simons agrees, saying he believes that marrying volunteerism and team-building with financial support is an important attribute of his firm’s “giving back approach.”
“Writing checks matters, but combining that with showing up, being present and engaged, and getting involved can have even greater impact and a longer runway,” Simons said.
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