Helping your clients launch a multigenerational giving plan
Instilling the idea of charitable giving in children and grandchildren may appear to be easy, but where should your clients begin, and how can they make it last? More and more, wealth advisors are being asked by their clients to weigh in on strategies for fostering a family's financial values, which frequently include charitable giving traditions.
An important first step in creating any multigenerational philanthropy plan is to advise clients to consider organizing their charitable giving, such as through a family donor-advised fund at the community foundation.
The process of organizing charitable giving itself creates much-needed clarity around the family's philanthropic purpose. This is because without an organized approach to family giving, it is easy for children and grandchildren to get confused about their parents' and grandparents' processes for making decisions about which nonprofits to support.
Establishing a fund at Akron Community Foundation can be a very effective solution for many of your clients who are launching a multigenerational giving strategy. Here's why:
- Community foundation vehicles are extremely flexible and can be used to engage an extended family in the process of charitable giving. Donor-advised funds, for example, are popular because they allow your client to name children and grandchildren as successor advisors.
- When your client organizes their charitable giving through a fund at the community foundation, the client can make a large transfer of cash or marketable securities that is immediately eligible for a charitable deduction. Your client can then recommend gifts to their favorite charities when the time is right. This is especially useful in the case of clients who sell a business or experience a large influx of taxable income in a single tax year.
- Establishing a donor-advised fund at the community foundation can be a much better choice for your family-oriented clients than a donor-advised fund offered through a brokerage firm. That's because, at a community foundation, your clients, as well as their children and grandchildren, are part of a community of giving and have opportunities to collaborate with other donors who share similar interests.
- The community foundation can work with a client and the client's family on a charitable giving plan that extends for multiple future generations. The experienced team at our Center for Family Philanthropy can assist with strategic grantmaking, family philanthropy, and opportunities to gain deep knowledge about local issues and nonprofits making a difference.
- Finally, the community foundation's tools and resources make it much easier for families to communicate across generations about the family's charitable giving purpose and goals for long-term impact.
We welcome the opportunity to work with you and any of your philanthropic clients to establish an enduring and rewarding family philanthropy program that is customized to meet each client's unique purpose. To learn more, contact Karen Hrdlicka, director of The Center for Family Philanthropy.
This content is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.