Everyone gets them — those one-off solicitations from charities.
It's easy to give $50 when an organization or cause is important to you or your family. But these gifts are often made spur of the moment, involve smaller dollar amounts, and may not reflect your broader giving strategies.
So how can you help clients translate their values into a strategic and effective giving plan? Here are some simple steps and queries to help clients not only align their charitable giving to their values but maximize their contributions in the process.
Identify goals
First, ask a client to write down their giving priorities. When asked outright, many people realize they don't know where they truly want to focus their philanthropic giving. This is a particularly important exercise when dealing with couples and families. Ask them to complete the list separately. Comparing notes, they might see that the wife wants to focus on housing and hunger solutions whereas the husband wants to give to youth athletics. One spouse may want to concentrate on giving within their local community while the other would prefer to make a regional, national or worldwide impact.
Once that's done, they need to think about how to translate those desires and values into an actual giving plan.
Craft a mission statement
Donors give most effectively when they connect with what inspires them. The following questions will guide clients as they create a mission statement, an essential document that will, among other things, help future stewards understand how to carry on a client's legacy of philanthropy.
- What do you want to achieve?
- What motivates you to give?
- What experiences have shaped your desire to give time or money?
- What is your vision for your community or the world?
- Could someone else step in and carry out your charitable wishes if necessary?
While this list is far from exhaustive, it should spark ideas on the range of giving opportunities. It can also prevent things from going wrong in the long run.
Here's an example : A client's parents passed away and left her with a foundation worth tens of millions of dollars. What they didn't leave was directions on how to spend the money. There was no mission statement. She couldn't sleep at night and considered just giving it all to her father's alma mater. The daughter then turned to a wealth advisor and together they discussed options for celebrating the parents' legacy and expanding the daughter's impact in a way that was meaningful to her. The woman ultimately decided to address homelessness, a dire problem in her community.
A clear mission statement is crucial for determining donor intent within a family. Without a mission statement, contradictory views from beneficiaries are common and problematic. Once a client aligns their assets with their values, be sure they stick to their stated giving formula to avoid family issues.
Choose the right charities
Your client now knows what they want to achieve and what motivates them. But how do they find the right charities?
The first step is to ensure it's a qualified charity — a nonprofit organization registered for tax-exempt status according to the U.S. Treasury.
The second step is to use online resources like
Once clients find organizations that might fit the bill, here are some questions to ask:
- What is the group's expense ratio?
- Are the bulk of expenses going toward intended programming and staffing in order to execute the organization's mission or is a large chunk of its budget spent on swag or other marketing expenditures to entice donors?
- Does the organization have a local, regional, national or global scope and does that scope comport with the client's goals and mission statement?
- What do others have to say about the charity? Have your client talk to people in their community to gather more information about the organization, its reputation and its impact.
Online resources like
Choose the giving vehicles
How a donor wants to give often depends on the control they wish to retain or cede regarding how the money will be used.
The most common form of charitable contribution is the outright gift of cash or other assets made during the donor's lifetime. Such gifts can range from small donations of cash or property to large endowments.
Charitable giving strategies often provide solutions unavailable through traditional estate planning.
Adapt to a changing landscape
Like any wealth plan, a charitable giving plan should be a living document that is reviewed every year. Just because a client gave to the local animal shelter for the past 10 years doesn't mean they have to give for another decade, let alone another year. How did their charitable giving plan go last year? What do they want to achieve next year?
As a client gains experience on the giving landscape, they may be ready to take on more complex challenges in more innovative ways. They might decide to partner with other donors or to engage in policy change to address root causes or bring a solution to scale.
Charitable giving is a powerful financial tool. It provides double satisfaction — making an impact while potentially lowering a donor's tax bill. Working together with an advisor helps donors craft the optimal giving strategy to maximize their philanthropic goals.
