December 5, 2011

Philanthropy Focus: Maximize Client Charitable Giving, Pt. 2—Growth and Grants

Fidelity's Amy Danforth on why growing assets and optimizing the granting process will help your client's philanthropy go further

In the first of our two-part series on how advisors can (why they should) maximize their clients' charitable giving, we explored how to pick the right assets to give and which vehicles to use.

Here in the second part of the series, we look at two more means of making gifts go further: growing the gifted assets and finding ways to make grants perform at top efficiency.

Investment of assets donated to a donor-advised fund can be directed by the donor, of course, so that they can continue to grow and provide additional funding for charitable grants. Other means of growing such assets for donors who give through Fidelity Charitable are investment pools and the Charitable Investment Advisor Program. According to Fidelity, such strategies have generated an additional $1 billion above the contributions received from donors for charitable purposes. Its online Pool Selector Tool helps to implement an investment strategy that takes into account how and when grants will be made.

Amy Danforth, senior vice president of Fidelity Charitable, adds that give-grow grants are particular features of its donor-advised fund. "Separate from checks and electronic bill pay is the investment portion," she says, "so that donors can invest money for specific periods of time to fulfill their goals." They can participate in the Charitable Investment Advisor Program, she adds, if they have an account with $250,000 or more. "It’s a significant win for advisors," she explains, "and enables them to put together a specific investment strategy for the clients they know so well, as they manage those clients’ other investments."

The fourth way to make giving more effective is to optimize grants. Knowing a client’s giving history can help here. If an advisor has a handle on the amounts and charitable recipients of past grants made by the client, he is better able to advise on where future grants should be made.

Fidelity Charitable’s Giving Account program will soon be providing advanced functionality on the Web that will provide donors with a full snapshot of their grant history from the time they established the account. Donors will be able to customize historical information and view total grant amounts in a specific year, over time, or to a specific organization or charitable sector, which will allow them to make much more informed and focused choices on future gifts.

Involving family in a charitable mission, carrying over into the next generation, can also optimize granting as family members using a single donor-advised fund can collaborate on recommending grants. Donors allowing adult children to direct granting from their fund will set up a legacy of giving.

Another way Fidelity Charitable donors can bring family and friends into their giving strategies, particularly around the holidays, is to give a Gift4Giving eGift funded from their giving account in amounts ranging from $50 to $5,000. Gift4Giving recipients may then recommend gifts via Fidelity Charitable’s web site, FidelityCharitable.org, to the charities of their choice.

In Part 1, we look at choosing the right assets and vehicles to make donations count.

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