From the August 2008 issue of Boomer Market Advisor • Subscribe!

Do well by doing good

With clients, charitable giving is hit or miss. The discussion either helps philanthropic-minded clients and advisors bond, or causes bottom-dollar clients to search for more practical advice. Either way, advisors need to be prepared to answer any and every question.

Call Drake Zimmerman unconventional. Call him altruistic. Just don't call him misguided for cultivating and nurturing a philanthropic spirit among his clients. For Zimmerman, a donor-philanthropy advisor with First Allied Securities in Normal, Ill., there's more to being an advisor than building assets under management, beating benchmarks and constantly questing for the next great client. While many of his peers have their hands full devising ways to make, save and stretch a dollar, Zimmerman focuses on on finding ways to help people give their dollars away. And because of that, he says, his practice is thriving.

"My business grows naturally and organically because of my work on the charitable giving side," says Zimmerman, who, along with a law degree, holds designations as a CFA (Chartered Financial Analyst) and a CAP (Chartered Advisor in Philanthropy).

It might seem counterintuitive, but advisors who help clients fulfill their philanthropic inclinations may actually put themselves in a position to make more money over the long run, even in cases where the planned giving strategies they help execute actually reduce AUM in the short term.

Zimmerman says being a charitable advisor helps him generate "jaw-dropping numbers. When you open your clients' hearts, you become their trusted advisor. You will be trusted with more assets than you could ever give away. There will be more assets and more commissions. But just as important, I think, there will be a feeling that you are doing more with yourself and your life, and more for your clients."

Charitable giving expertise needn't divert an advisor's focus from bottom-line financial issues. In fact, the two are compatible and complementary, contends Charles B. Maclean, Ph.D., founder of PhilanthropyNow, a Portland, Ore. organization that advocates planned giving activities in the advisory community and elsewhere. It is possible for an advisor to be a planned-giving expert while maintaining focus on the client's financial goals and needs - the idea, he says, is to "do well by doing good."

Helping clients recognize and fulfill their philanthropic wishes builds a relationship of trust with those clients. But, Maclean says, relatives of clients can also be prospective future clients, since family members often become involved in charitable giving discussions. What's more, Maclean adds, charitable giving expertise can also distinguish an advisor competiting with professionals who also target wealthy individuals with philanthropic inclinations, he adds. "It can be an important differentiator."

On the other side, advisors whose relationships with clients are mostly transactional are vulnerable to losing clients, particularly during difficult economic times, says Rod Zeeb, JD, president and CEO of the Heritage Institute, an organization that trains advisors how to foster philanthropic activities among clients and their families.

"If you're not raising the giving question with clients who are philanthropically inclined, they may change advisors," Maclean says. "If you want to be perceived as the go-to, one-stop type of advisor, raising the giving question should be part and parcel of the way you do business."

In his recently released report, "Financial Advisors as Guiding Stars to Philanthropic Giving" (available for free download at, Maclean dubs advisors who do not raise the giving question with clients "goalies" because their overriding focus is to protect AUM from significant depletion. Advisors who are interested in building their practices and their relationships with clients are better served, he says, by being either a "GPS" or a "guiding star."

GPS advisors raise the giving question with all their clients, then they direct them to charitable giving specialists who develop specifics of a giving plan. Advisors in the guiding star category not only raise the giving question with clients, they have the expertise to act as one-stop philanthropic council.

Before raising the giving question, advisors must be ready to offer the right answers. That means knowing how to match giving tools, maneuvers and strategies to the right situations, plus have an ability to ethically and tactfully lead clients through the process of defining their philanthropic priorities and devising a charitable giving plan that jibes with their financial outlook and lifestyle.

The process of turning oneself into a charitable giving GPS or guiding star begins with education. And that education can come from a variety of sources, including:

  • Personal charitable involvement - "One of the most powerful ways to gain expertise," says Zeeb, "is to find a charity that you're passionate about and go out and volunteer."
  • Networking within groups of like-minded professionals, donors and charities - "Most of what I learned [about charitable giving strategies] has come by getting out and doing it, and by asking the experts, especially attorneys, lots of questions," explains Richard A. Stumpf, CFP, principal at Financial Benefits Inc. in Wichita, Kan. Many of those experts he meets via an organization called the Planned Giving Roundtable, one of about 130 local groups affiliated with the National Committee on Planned Giving ( Stumpf also recommends the Leave a Legacy organization ( as a good starting point for advisors and clients. For attorneys and estate planners, Zeeb suggests the National Network of Estate Planning Attorneys ( and WealthCounsel ( as valuable information and networking hubs. Professionals in groups like these are not only great for guidance, they also can become valuable sources for referrals.
  • A mentoring relationship with an experienced charitable advisor - "Somebody who has already been up the learning curve," according to Zimmerman. A group called Advisors in Philanthropy (, of which Zimmerman is chair, is good for networking and mentoring, says Zeeb, because it incorporates advisors from various disciplines - including accountants, estate tax attorneys, wealth managers, donor advisors, trust officers and more - who are affiliated with giving activities.
  • Programs such as those offered by the American College (to earn the CAP designation:, and the Heritage Institute (www. - The CAP course, Zimmerman says, concentrates on technical maneuvers and tools associated with charitable giving - when to use and how to set up trusts, family foundations, etc. "No program has it all," he says, "but the CAP is one of the best because it brings various disciplines together." Heritage Institute programs are less technical and more relational in nature, instead focusing on teaching advisors how to inspire and how to pass on the philanthropic spirit in people.
  • Fund companies, insurance companies and other entities that provide the instruments used to execute giving strategies - Companies such as Fidelity, Merrill Lynch and American Endowment that sponsor donor-advised funds are good sources of generic information about charitable giving tools and their applications, says Zeeb.
  • Once an advisor is confident he or she has accumulated enough knowledge to answer almost any charitable giving question a client could pose, it's time to start leveraging that knowledge to benefit the practice. The first step, Maclean says, is to update the advisor's Web site and any promotional or informational materials by listing "counsel on charitable/philanthropic wishes" (or similar language) among the services he or she offers clients. This is also the time, he says, to start "respectfully, consistently, ethically and repeatedly" posing the giving question to clients.
  • Avoid pushing clients to be philanthropic, Zimmerman cautions. "It better be on the client's agenda." One way to make it part of their agenda, he says, is to point out tangible potential benefits - not just the feel-good aspect - such as dramatic reduction or outright elimination of estate taxes, increases in spendable cash flow, etc. It also helps if the advisor "walks the walk" by having his or her own charitable giving mission.

Once the client's charitable inclinations become clear, the advisor can focus on specific maneuvers and propose bringing other family members into the discussion. "The goal is to find out what they are about, look at their assets and figure out how to reposition those assets to fulfill their charitable vision," Zimmerman says.

To better expose their planned giving expertise to a broader audience, advisors should also consider aligning with local charitable organizations that hold public donor motivation programs - educational seminar-type events designed to bring in new donors. Often organizations will ask a trusted advisor with charitable giving expertise to be part of the program. "It's a setting that works well for charities and for advisors," Zimmerman says, "as a route to new donors and new clients."

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