A philanthropic consultantsomeone who can help you start discussing charitable giving with your clientsis waiting to help you.

As you meet the needs of your client, your consultant can help with the specialized issues that surround charitable giving techniques. Best of all, the consulting service is free. But you have to make the first move by contacting the development staff at your local community foundation

What are community foundations?

Community foundations are public charities that manage gifts from various donors for any type of charitable purpose. Typically, a board of directors that consists of community leaders manages these foundations. Foundation employees and volunteers help donors design charitable funds tailored to their values, interests and objectives.

The foundation collects charitable funds and makes grants to charities based on the donors wishes. This enables the donor to make a tax-deductible contribution, exert influence over how the funds are used, and create a legacy that benefits the community without bearing the administrative burden and complexity of other charitable giving options.

Community foundations differ from other charities in important ways. First, they employ trained development staff to provide personalized consulting services. And because they do not provide charitable services themselves, they can provide a broad overview of different giving opportunities.

Additionally, they provide community expertise and leadership, and can identify charities that match a donors objectives. Finally, many also facilitate planned giving arrangements such as donor-advised funds, charitable gift annuities and charitable trust administration.

Why work together? Developing plans that take your clients financial and charitable needs into account is a constant challenge. Specialized marketing and technical expertise is needed to map out the opportunities and options available. While community foundations do not pay financial professionals, they certainly offer the opportunity to advance their businesses.

Wealth replacement trusts. Donors typically have a stronger interest in giving to family members than to charity. So, charitable gifts usually supplementrather than reducefamily giving and estate planning. Trust-owned life insurance often is used as a funding vehicle to replace the wealth for the family.

These wealth replacement trusts are designed to maximize transfers to family members. Income tax deductions or a charitable gift annuity may help finance the gifts of premiums into the trust.

Charitable giving with life insurance. Life insurance and annuity products may make giving more convenient, flexible and significant. While a community foundation provides giving options, the financial professional can augment those options with financial products.

Access to new prospects. Access to new prospects may be obtained through networking or seminars. By bringing the work of a charity with which you are associated to the attention of the community, you may be able to secure new resources for the charity or connect it to other like-minded organizations.

Specialized partners. A community foundation wants to be a resource for you and a philanthropic partner for your clients. Financial professionals and charitable giving advisors evaluate individual situations differently. Clients will be interested in hearing both viewpoints before making financial decisions.

Resources. The community foundation staff may understand the many options of charitable giving, including tax benefits. They often provide unique resources and planning tools to help donors and their advisors craft charitable giving plans. Many community foundations also offer access to the Planned Giving Design Center, a national network of educational, design and implementation resource Web sites dedicated to enhancing philanthropy.

How can we work together?

Take the first step by introducing yourself to the local community foundations directors and development staff. Once they know that you have an interest and a clientele that considers charitable giving, they can mobilize local resources and tailor creative ideas.

In your estate planning presentations to clients, mention your local community foundation and contact person. If your clients respond favorably, let your contact person identify options that you can evaluate with your clients.

Sponsor an estate planning seminar and devote a segment to charitable giving. The community foundation may provide a speaker or materials that will “bring to life” charitable giving possibilities.

Join together to reach out to local businesses and civic organizations. Co-sponsoring a chamber of commerce gathering, for instance, will provide a financial professional with both name recognition and an identity with a charitable giving professional niche.

The knowledge and resources of community foundations can expand your business opportunities. But the first step, say community foundation leaders, is to give them a call and introduce yourself.

Learn what your local community foundation has to offer and cultivate the development officer. You just may find it mutually beneficial to incorporate him or her into your practice as a “philanthropy consultant.”

Paul J. Farrell, JD, CLU, is assistant vice president for advanced sales for Jefferson Pilot Financial. He can be reached via e-mail at paul.farrell@jpfinancial.com.


Reproduced from National Underwriter Edition, December 10, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.