The Role of Professional Advisors in Guiding Donors

Part two in a six part series

Introduction

Charitable giving is one of the most meaningful ways that donors and their families express their values, support the causes they care about and create a lasting impact.

While generosity often begins with personal motivation, turning philanthropic intent into effective giving requires guidance from the donor’s professional advisors.

Whether it is the donor’s attorney, accountant, financial advisor, or our neutral, independent charitable planning partners, these individuals play a critical role in helping donors maximize their financial benefits while making a meaningful contribution to the causes they care about.

How to Give

One of the most important responsibilities of an advisor is explaining the various giving methods available to donors.

Advisors can help donors understand how they can make a charitable gift by explaining their options and matching the gifting vehicle to the donor’s objectives. By first describing the different ways that the donor can give, the advisor helps the donor understand not only how each method works but can narrow down the choices based on the desired outcome.

There is no “one size fits all” when it comes to charitable giving.

The charitable giving field offers a wide array of giving vehicles, including outright gifts, donor advised funds (DAFs), charitable remainder trusts (CRTs), charitable gift annuities (CGAs) and estate-type gifts such as bequests or beneficiary designations. Each gifting strategy has its distinct characteristics and benefits. Knowing which ones to pursue will depend on what the donor is hoping to accomplish with the gift.

Advisors may choose to analyze the ways a donor can give by first looking at the simplest and easiest options first. If a donor desires immediate impact with the largest deduction, then the advisor might explore outright gifts of cash, appreciated assets or contributions to a DAF. Advisors can also emphasize that outright gifts are easy to complete and immediately useful to the charity. Exploring outright gifts is often the practical starting point before advisors introduce more complex giving options.

For donors with a desire to receive both a charitable deduction and lifetime income, options such as CGAs and CRTs may be appropriate gifting vehicles to suggest. Often, advisors look for clues from the donor, such as the need for cash-flow or supplemental income, that will lead the advisor towards these options.

Once the advisor knows that a structured vehicle is the appropriate choice for the donor, they can proceed to discussing which specific option best meets the donor’s goals. Most often, advisors will be able to recommend one over the other by factoring in the donor’s age, risk tolerance and desired level of involvement. For example, CGAs are often used for senior donors who prefer fixed and guaranteed payments. On the other hand, CRTs are best suited for donors who are more comfortable with varied income, trustee oversight and working with an attorney.

Finally, if the donor wishes to retain the use of their assets throughout their lifetime, advisors can discuss testamentary gifts such as making a bequest through their estate plan.

Advisors frequently encounter donors who want to give but may be unwilling to part with assets during their lifetime out of concern for long-term financial security during their retirement years. Advisors recognize these concerns as opportunities to explore testamentary planning options to accomplish the donor’s philanthropic goals.

When advisors effectively explain that these types of gifts are revocable, flexible and adjustable over time, donors tend to feel more comfortable with the idea and make larger gifts out of their estate than they would have during their lifetime.

If you would like to learn more, schedule a free consultation with our independent gift-planning partner. Or have your advisor meet our charitable planning partner to understand how they support the work of your existing team. Email David Olive, Director of Major & Planned Gifts, or call him at 865.637.3227 ext. 254.

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Part one in a six part series

Identifying Donor Intent and Goals

An important role of professional advisors is helping donors articulate their charitable objectives clearly so that the best charitable strategies are pursued. Identifying and clarifying a donor’s goals starts with asking targeted questions.

Rather than diving into the technical aspects first, advisors typically ask about the causes that matter most to the donor, whether they prefer to give now and/or in the future, which assets could be used and whether the gift is intended to be immediate, long-term, or multigenerational.

Everyone has a story and advisors often ask donors to share theirs to understand how their personal experiences have influenced their philanthropic interests. Understanding a donor’s journey helps shape and align their philanthropic goals. Identifying a donor’s objectives can be done by confidently exploring with a donor how to give, what assets to use and why the strategies support the donor’s objectives.

Take the first step.

Schedule a free consultation with our independent gift-planning partner. Or have your advisor meet our charitable planning partner to understand how they support the work of your existing team. Email David Olive, Director of Major & Planned Gifts, or call him at 865.637.3227 ext. 254.