We understand that it can be hard to know when to start a conversation with a client about charitable giving. Asking a client about philanthropy is an important part of providing complete financial planning and professional advice to your clients. Here’s why:
- Many clients are already in the habit of supporting charity, so incorporating giving into the planning process is a natural reflection of most clients’ existing habits and values.
- For clients with substantial estates, minimizing or eliminating estate taxes is difficult to do without some charitable planning. Regardless of the status of the estate tax, charitable planning offers tax advantages such as in the sale of highly appreciated stock, business succession planning, income tax planning, and dispositions of retirement accounts on death.
- Philanthropy can help resolve many personal issues that are deeply important to clients.
- Studies by the Philanthropic Initiative of Boston have shown that clients want help with integrating philanthropy into their planning process.
Good charitable advice strengthens the client relationship by providing better service to the client and generating greater client loyalty. Clients expect referrals to experts in philanthropy just as they would with other specialties like accounting or law. Responsive, impact-driven charitable planning can meet multiple goals, and result in a larger benefit to family members.
You will add long-term value to your client relationships if you bring up charitable giving. Less than half of high-net-worth people surveyed feel their advisors address their personal and charitable goals well. And the goals aren’t just about saving taxes – just 16% of HNW individuals say it’s a primary driver of their charitable giving.
So how do you bring it up? Add it to your intake forms and make it part of your annual meeting agenda. Then, start the conversation with open-ended questions:
- What causes do you care about? How would you like to support those causes?
- How have your past charitable contributions reflected your values and hopes for a better future?
- What would you like to change or preserve in our community and beyond?
- What sort of family legacy and charitable legacy would you like to leave?
- Would you like to learn about ways to receive maximum tax benefits for your charitable contributions?