Schwab Donor-Advised Funds Set Contribution, New Account Records in 2012

Strategic thinking can help donors and advisors meet philanthropic goals

(Photo: AP) (Photo: AP)

Schwab Charitable took in a record level of contributions and reached a high in new accounts during its 2012 giving season, the donor-advised fund organization reported this week.

Contributions more than tripled and new accounts doubled over the same period in 2011, spurred by the uncertain tax environment amidst the fiscal cliff standoff, Schwab said in a statement.

Besides making year-end contribution decisions, many advisors and individuals have been actively recommending grants to individual charities.

“We approved 70% more grants in the fourth quarter this year than we did last year,” Kim Laughton, Schwab Charitable’s president, said in the statement.

“We expect to see this granting activity continue through the first quarter because of the many new accounts recently established.”

Schwab Charitable has outlined five areas for donors and their advisors to consider when thinking about a granting strategy this year:

1. Develop a purposeful strategy for giving.

  • Be proactive and purposeful about your giving
  • Think about what you want to achieve with your charitable dollars
  • Consult a financial advisor to help you determine priorities and the level of support you want to provide throughout the year
  • Monitor your progress against the strategy throughout the year by checking your DAF online summary.

A purposeful strategy, Schwab noted, can also help say no to solicitations that do not fit within that strategy.

2. Choose the organizations to support.

A DAF allows you to support one or many causes. Deciding which causes to support might be an individual decision, or one in which your family can participate.

3. Decide on grant timing and amounts.

Consider whether the causes you are supporting are likely to benefit most from a onetime grant at a certain time of the year, or a series of gifts throughout the year.

With a DAF, you can give over time, and may recommend grants of $50 or more at any time to any IRS-approved 501(c)(3) public charity.

4. Choose your desired level of recognition.

Do you want to be recognized for your charitable gift, or would you prefer to give anonymously? A DAF gives you flexibility to decide how to be recognized for each grant you recommend. Those seeking maximum recognition can have their gifts accompanied by letters on stationery personalized with their account’s special account name.

5. Consider the long term.

Donors are able to extend their charitable giving beyond their lifetimes through the Charitable Legacy Program. Used in conjunction with a holistic estate plan, this program gives qualified donors the flexibility to provide charitable organizations with support over time after their death.

“Tax-smart charitable giving will continue to be a welcomed discussion topic between individuals and advisors, especially given that tax rates are now higher at the upper-income levels and the value of a charitable deduction for many has therefore increased,” Laughton said.

“Advisors can build higher-value relationships and improve client retention by including philanthropic goals in their wealth management conversations.”

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