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Financial Planning > Charitable Giving

Generosity Rose in 2005

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There’s good news about philanthropy in America: donors as a group gave 6% more to charities in 2005, an estimated $260 billion, up from $245 billion in 2004, according to Giving USA, written by the Center on Philanthropy at Indiana University and published by the Giving USA Foundation. Individuals were, as usual, the most generous, donating 76.5% of the gifts. Many of the donations were specifically to disaster-relief organizations in reaction to catastrophic events including the tsunami in Southeast Asia, and Hurricane Katrina, but donations were up in all major categories except for the arts, culture, and humanities sub-sector.

Americans’ generosity leads to a unique opportunity for advisors. When clients want to plan their philanthropy there are many ways an advisor might react. Some may feel that they are in competition with charities for client/donors’ assets, and while that may be true in some cases, there are ways for advisors to take on the responsibility of helping clients structure ways of giving that are beneficial to the client, her heirs, the charity, and even the advisor who may retain control of management of those charitable assets.

Enter Robert Sharpe, president of The Sharpe Group, based in Memphis and Washington, D.C. He consults with charitable organizations to help them increase donor awareness and understanding of the most efficient ways to give. He says that often, an “investment advisor is the person closest to the money and closest to the donor.” Advisors who know the best ways to structure gifts become the “quarterback,” calling in necessary legal, accounting and planning expertise while retaining control of the assets. To do this advisors have to look at charitable giving as a big-picture issue and “know when to drive, and when to ride in the back seat.” If an advisor thinks they are competing for assets, Sharpe argues, “nobody wins.” What is wiser–and possible–is for an advisor to serve client/donors by creating the best plan, one that can benefit all concerned.

To learn more about strategies that can help your clients become philanthropists, Sharpe suggests a visit to the National Committee on Planned Giving (NCPG) Web site, and says advisors may want to attend a seminar, or even a one-month training program at the NCPG’s local planned giving council. Local members are accountants, attorneys and financial planners, and some of them specialize in charitable giving strategies, so advisors who want to find a stable of complementary talent may want to start there. Advisors can also visit for articles by Sharpe and other experts in the planned giving field.


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