Philanthropic planning is wealth management's next competitive frontier, beyond DAFs

Eighty percent of high-net-worth clients believe it is their financial advisor's obligation to raise the topic of philanthropy, according to recent research, but fewer than half of advisors are actually delivering.

Sabrina Bailey, the newly appointed president of Foundation Source, a leading provider of philanthropic software and solutions based in Fairfield, Connecticut, has been speaking with InvestmentNews about why this gap exists and what can be done to address it.

"The gap isn't one of awareness, it's one of infrastructure," Bailey said. "Advisors need access to specialized expertise, technology and operational support that make planning across a spectrum of charitable vehicles practical to deliver."

Bailey stepped into the president's role at Foundation Source in March 2026 at a moment of significant industry pressure. The Philanthropic Initiative’s recent research found that 88 percent of high-net-worth clients report having discussed philanthropy with their advisor, up from 67 percent in 2018, while 99 percent of advisors agree these conversations matter. But only 45 percent of advisors are having them with most of their clients.

Beyond the donor-advised fund

For years, charitable planning in wealth management largely meant recommending a donor-advised fund as a simple, tax-efficient vehicle that handles the administrative basics. Bailey argues that the landscape has shifted considerably, and that a truly integrated philanthropic advisory offering now spans multiple structures with distinct purposes.

"The reality is that different charitable vehicles are designed to achieve different outcomes," she said. "A donor-advised fund may be ideal for administrative simplicity and immediate tax efficiency. A private foundation can provide a platform for long-term family philanthropy, governance and strategic grant making. Charitable trusts can be powerful tools for balancing charitable goals with income, wealth transfer, and sophisticated estate planning objectives."

The advisor's job, Bailey contends, is not to push a product but to match the right structure or combination of structures to each client's financial, family, and philanthropic goals. "Rather than focusing on a particular product, an advisor's job is to help clients select and integrate the charitable structures that best support their overall financial, family, and philanthropic priorities," she said.

PhilTech: the next evolution in advisor technology

Bailey says "PhilTech" — technology-enabled charitable planning solutions — to describe what she sees as the next logical stage in the evolution of advisor tools. She draws a direct parallel to transformations that have already reshaped the industry.

"Think about what's happened over the last two decades," she said. "CRM changed relationship management. Planning software transformed financial planning. Portfolio platforms completely reshaped investment management and advice. PhilTech is the next logical evolution in bringing the same level of efficiency, integration and scalability to charitable planning that advisors already rely on across the rest of their practice."

The competitive stakes are becoming clearer. According to the 2026 TPI Study, 75 percent of high-net-worth clients say they would be more likely to choose an advisor who is knowledgeable about philanthropy — nearly double the 40 percent who said the same in 2018. And 90 percent of advisors now say philanthropic conversations are good for business, deepening existing client relationships and establishing new ones.

"Advisors shouldn't have to leave their existing workflow to deliver philanthropic planning," Bailey said. "The best PhilTech disappears into the broader advisor tech stack, sharing data, reducing duplicate work and making charitable planning feel like a natural extension of financial planning."

When evaluating platforms, Bailey says the right questions go beyond features. "The more important questions are about fit and support: whether the tool integrates into the existing tech stack and whether real expertise stands behind it," she said. "If a platform sits off by itself, it's far less likely to become part of the everyday workflow."

The multigenerational opportunity

One of the most significant — and most overlooked — opportunities Bailey identifies is using philanthropy to engage the next generation of wealth inheritors. Ninety-five percent of advisors, according to the 2026 TPI Study, say philanthropy plays an important role in building relationships with clients' extended families.

"When advisors use giving to engage heirs early, they build trust with the generation that will ultimately inherit the wealth," Bailey said. "That transforms a single relationship into a multigenerational one and increases the likelihood of retaining those assets long after they transfer."

Foundation Source has pursued that vision through a series of acquisitions and partnerships. In 2025, the firm facilitated more than $4 billion in charitable grants — the highest annual total in its history, according to the company — while building what Bailey describes as a comprehensive, end-to-end platform covering the full spectrum of charitable vehicles, supported by integrated technology, administrative services, and advisory expertise.

"We didn't make these acquisitions simply to expand our solution set," Bailey said. "They were driven by a clear view of where philanthropic planning is headed: advisors increasingly want a single partner that can support clients across the full spectrum of charitable giving."

"When technology, administration and philanthropic expertise come together in one place," she said, "charitable planning becomes easier for advisors to implement at scale."