The art of charitable planning

Joel M. Breitstein, Esq.

As advisors work to create plans that meet client needs and reflect their values, clients increasingly expect their advisors to offer philanthropic information and guidance. CPAs play a key role in providing clients with opportunities and information on optimizing their charitable giving.

Increasingly, becoming an effective and satisfied donor is an important objective of many high-wealth individuals and families. The CPA who wishes to effectively counsel clients has the opportunity to enrich that relationship by becoming conversant with the ways and means of philanthropy. And recent research into advisor practice around philanthropy indicates that advisors who are able and willing to engage their clients around philanthropy enjoy both their clients’ respect and loyalty.

Often, CPAs are reluctant to discuss charitable planning with their clients because they equate this area of planning with soliciting the client for a charitable gift. Some professional advisors feel uncomfortable talking about charitable giving unless the client raises the subject first. This dilemma is resolved as soon as charitable planning strategies are seen as a critical piece of the overall planning process.

By becoming informed about and skilled at working with clients in achieving their philanthropic potential, professional advisors stand to:

expand the range of services they offer clients;
distinguish themselves from the competition;
build client satisfaction and loyalty;
increase the likelihood of a long-term relationship with clients.

How do you initiate the topic of philanthropy with your clients? The changing face of philanthropy suggests you raise the topic just as you have been accustomed to raising potentially delicate topics with your clients in the past. Your client depends on you to initiate conversations that will permit them to appreciate available possibilities, conversations without which the client might continue to think of philanthropy as a one-time gift to a faceless institution.

Questions you might use to start the conversation include the following:

Beyond family and business, what is most important to you?
What does giving mean to you?
Five years from now, what do you want your philanthropy to say about you? Your family?
Why do some causes pull powerfully at you while others have no appeal?
Which volunteer experiences have been the most rewarding for you?

Last but not least, do not overlook the huge tax advantages associated with philanthropic giving. With the highest of income tax rates, philanthropic gifts may end up costing the tax authorities much more than they cost descendants.

What is most important is that the professional advisor be knowledgeable about the many ways charitable planning options can help solve everyday tax, estate and financial planning problems while adding value to the client’s family and the community.

Mr. Breitstein is managing director of Philanthropic Advisory Services at Legg Mason Trust. He is also chair of the Professional Advisors Initiative of the Baltimore Giving Project (BGP).

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