Big Gifts, Bullish Portfolios, and Kids Who Move Away

Recent studies show that 85.1% of affluent households give to charity, but only 22% use a structured giving vehicle such as a donor-advised fund. If you’re not talking about charitable giving with your high net-worth clients, 2024 is the year to start! 

Take a few minutes this month to scan your client list for these three common client scenarios and related opportunities for charitable giving solutions. 

1. Clients who made significant charitable gifts at year-end

You’re probably aware of at least a few clients who increased their charitable giving at the end of 2023. Perhaps you worked with a client to establish a donor-advised fund, and they would be eager for a conversation about putting their dollars to work. Or maybe you learned about a client’s passion for historic preservation, and helped them structure a Qualified Charitable Distribution to a field-of-interest fund. Now that the dust has settled on year-end planning activities, go back to these clients to find out more about their overall philanthropic plans. You may discover that a client would like to work with you to update their estate plan to include a bequest to their fund at the Community Foundation, set up a charitable remainder trust with highly-appreciated stock, or proactively plan their charitable gifts for 2024 to get a jump on tax strategies.  

2. Clients whose stock portfolios have rallied

2023 brought good news and record highs for the stock market.  As always (and perhaps especially now!), giving appreciated, publicly-traded stock to charitable organizations is a highly effective tax strategy. This is because capital gains tax is avoided when your client transfers long-term, marketable securities to a fund at the Community Foundation or other public charity. The client is typically eligible for an income tax deduction at the fair market value of the securities, and when the charity sells those securities, they do not pay capital gains tax. This is a win-win for your client and the charity. Scan your client list for those who are holding long-term stock positions that have appreciated substantially since they bought them, especially with the market’s latest rally.

3. Clients whose children have moved away

Children of affluent parents tend to move away. This means many of your clients may be seeking ways to stay connected with their children. Remember that while the Community Foundation can help your clients maximize the impact and tax benefits of their local giving, our tools are also very geographically flexible. This means, for example, that your clients can use their donor-advised fund to support 501(c)(3) organizations across the country, including in communities where their grown children are living. When you demonstrate your interest in your clients’ charitable giving priorities, you are not only strengthening your client relationships, but you’re also helping clients strengthen relationships with their children. 

Did you know? An analysis of over 1,200 RIAs and family offices found that those who offer charitable planning had six times the median assets and three times the median organic growth per investor as compared to advisors who don’t.