Making the Most of Your Charitable Dollars

Why should you talk to your clients about charitable giving?

Some advisors are reluctant to begin a charitable giving conversation with their client, and may be concerned about appearing to make a values judgment, especially if the client has not expressed charitable intentions.

However, by not broaching the subject of charitable giving, a significant opportunity may be lost for your client and the community. In fact, many individuals expect their professional advisors to bring up the subject if appropriate… and assume charitable giving is not an option if the subject is not raised.

There’s so much more we’d like you to know. Your community foundation can help you help your clients achieve their charitable giving goals. We welcome the opportunity to work with you.

Retiring in comfort. Your client is concerned about running out of money during her lifetime, but has always been charitable. Recommend establishing a life income gift (such as a Charitable Remainder Trust) at her community foundation that pays income potentially for life. Upon your client’s death, the gift can be distributed by the community foundation in accordance with her charitable interests.

Establishing a private foundation. Your client is thinking about establishing a private foundation, but is looking for a simpler, more cost-efficient alternative. The community foundation can help you and your client analyze the pros and cons of creating a Donor Advised Fund, a supporting organization, or a private foundation.

Closely held stock. Your client’s personal net worth is primarily tied up in a closely held company, but it’s important for her to give back to the community. Recommend establishing a Donor Advised Fund or planned gift; your client is eligible for a tax deduction measured by the fair market value of appreciated stock (less any planned gift value).

Sale or disposition of highly appreciated stock. Your client has appreciated stock and wants to use a portion of the gains for charitable giving, but the identified charities are too small to accept direct stock gifts. Suggest establishing a fund at a community foundation with a gift of appreciated stock. Your client receives a tax deduction on the full market value, while avoiding the capital gains tax that would otherwise arise from sale of the stock. Your client can even be involved in recommending uses for the gift, including the organizations and programs she cares about most.

Sale of a business. Your client owns highly appreciated stock in a company that is about to be acquired. The community foundation can work with you to suggest several ways to structure a charitable gift (including the use of planned giving techniques) to help your client reduce capital gains tax and maximize impact to the community.

Strategic giving. Your client is passionate about helping meet a specific community need and wants to make a meaningful gift. You and your client can work with our grantmaking experts to understand community needs and programs and then direct gift dollars to make the greatest impact.

Substantial IRA/401(k) assets. Your client wants to leave her estate to community and family, and has substantial assets in retirement accounts. The community foundation can help you and your client evaluate the most beneficial asset distribution to minimize taxes, giving more to her heirs and preserving charitable intent.