Help Clients Create a Charitable Legacy—and Build Your Client Base
More than 80% of advisors say that few—if any—clients involve the next generation in philanthropy, according to a Key Private Bank advisor survey. Yet many clients would like their children to carry on their giving legacy. As a financial advisor, you are in a strong position to help your clients achieve this goal.
By helping clients plan a charitable legacy, you may begin to build relationships with the clients’ extended family. This could be a valuable way to help you retain and expand your asset base. Over the next 25 years, nearly 45 million U.S. households will transfer more than $68 trillion to heirs and charity, according to a report by analytics consulting firm Cerulli Associates. The next generation often brings those inherited assets to a new advisor—particularly if they have had little contact with their parent’s advisor.
A donor-advised fund (DAF) can be an excellent solution—for advisor, client and family. With a DAF, your clients can involve their children in giving during their lifetime, and they can ensure that their giving tradition continues by appointing their children as successor advisors of the DAF. As the advisor, you have the opportunity to build trust and deepen your relationship with the entire family.
With an NPT DAF, there are three primary legacy succession options:
1. Designating Charitable Beneficiaries. Your clients can recommend one or more charities to receive a lump sum grant at the time of their death by designating a percentage of assets left to each charity.
2. Naming Individual Successors. Clients may appoint up to four individual successor advisors to be designated as primary advisors on new DAF accounts. Each new DAF would receive a percentage of DAF assets, as determined by your client.
3. Establishing an Endowment. Clients with $100,000 or more in their DAF are eligible for NPT’s endowment program and can recommend a percentage of assets to be distributed over time in annual recurring grants to one or more charities.
Your clients can also choose a mix of the three legacy plan options. For instance, they may elect to name individual successors to receive 75% of remaining DAF assets and recommend a designated charitable recipient for 25% of assets. As the financial advisor, you will have the opportunity to talk through these options with your clients and help them work with their children. By taking an interest in the causes most important to them and helping them develop strategies to create a lasting legacy, you will go a long way toward cementing your relationship with the entire family.
Andrew Hastings is NPT’s Chief Development Officer and has 25 years of experience in the philanthropic and nonprofit marketplace. Mr. Hastings is responsible for NPT’s advanced gift planning and major gifts, business development and institutional relationships.
NPT does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.
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Catch up on the rest of the DAF Insights for Advisors series:
Four Reasons to Talk to Clients about Donor-Advised Funds by Andrew Hastings, Chief Development Officer
How to Talk with Clients about Donor-Advised Funds by Ellen Galluccio, Director of Development, Northeast Region
Three Key Moments to Talk to Clients about DAFs by Eric Joranson, Senior Director, Advanced Strategies
Donating Pre-IPO Shares to a Donor-Advised Fund by Jeff Gerold, CFP, Senior Director of Development, Southwest
IRA Charitable Rollovers: Helping Clients Put a Distribution to Good Use with a Designated Fund by Ethan Burke, Director of Development, Southeast
Do Your Clients Need to Update their Estate Plans? Here’s How a Donor-Advised Fund Can Help by Eric Joranson, Senior Director, Advanced Strategies
Helping Clients Convert a Business Interest into Charitable Capital by Fernando Gonzalez, Director of Development, Mid-Atlantic
Three Things Executives Should Know about Donating Restricted or Control Stock to Charity by Ellen Galluccio, Director of Development, Northeast
Five Strategies to Help Clients Make the Most of Year-End Giving by Jeff Gerold, CFP, Senior Director of Development, Southwest
2019 in Review: NPT’s Most Popular Blog Posts by Amy Gianficaro, Director of Marketing