Giving & Receiving

There is no deeper way to connect with clients than through the philanthropic impulse — yet many advisors steer clear of the conversation.

As Randy Fox, president of International Association of Advisors in Philanthropy, notes: “Is this for everybody? No. Most advisors are ill equipped. Most advisors don’t have the inclination to really want to go that deep. For some of them, it’s plain too touchy-feely. When you start talking to your clients about family and values and what’s important to them, you’re on different ground. The advisor has to be prepared for that.”

Yet, however reluctantly, an increasing number of advisors are introducing philanthropy into the client engagement. The proof: Philanthropy blogs are buzzing about the momentum that’s building in the charitable giving channel. Consultants to donors are reporting heightened participation on the part of wealth managers. And training programs are being developed to help advisors reach more deeply into their clients’ hearts and minds.

“It looks like there’s a wave coming,” reports Fox.

Eric Kessler, principal of the Washington, D.C.-based Arabella Philanthropic Investment Advisors, says inheritors and “new wealth” are driving the trend.

“I think the trend is people who are in a successful line of business today are bringing their business prowess to their philanthropy,” according to Kessler, who heads a national firm that advises individual, family, institutional and corporate philanthropists on the effectiveness of their grant making. “It helps that they treat philanthropy like an investment. These are people who are expecting returns, expecting impact, from their philanthropy. What we’re talking about is the best future client for smart financial advisors.”

Pivotal to the trend: the non-profit charitable organization.

The nation’s nearly 700 community foundations, for example, are providing critical linkage between financial advisors and their clients’ charitable intent.

Marin Community Foundation, one of largest community foundations in the country, first began doing outreach to professional advisors 10 years ago. Today, the foundation has 1,400 advisors on its mailing list. Not coincidentally, the foundation currently relies almost exclusively on advisors for donor referrals.

“We want to be their philanthropic resource. If an advisor wants to know how to set up a charitable remainder trust, and maybe the advisor hasn’t done that before, I want them to call me. If they have a client who’s trying to figure out what charity to give to, call me,” says attorney Aviva Shiff Boedecker, director of gift planning for Marin Community Foundation.

“The thing is community foundations don’t have a natural constituency. It’s not like a university with loyal alumni or a ballet with fans. We don’t have grateful patients. Frankly, most people aren’t going to think of the community foundation when they’re thinking of giving. Most people don’t know what a community foundation is,” she adds. “That’s why we look to the professional advisor community for referrals.”

Cincinnati certified financial planner Barbara Culver, who serves the $5 million to $50 million marketplace, thinks of the not-for-profit charitable organization as philanthropy’s “forgotten gatekeeper.”

Yet, as Culver points out, it’s often the non-profit that can serve as the obvious venue for the philanthropic conversation.

“Sometimes, an advisor might take the lead role in helping the client understand his or her philanthropic possibilities by connecting them with a not-for-profit. There are also not-for-profits in need of professionals to come in and offer programs for their donors on [giving] ideas, strategies and techniques,” says Culver, who’s developed a client-centered training tool to elevate the experience between financial and legal professionals and their clients.

“Ultimately, they come to see each other as teammates in the process. Remember, we’re all trying to serve the client-donor. The unique role the advisor plays is that they can draw the technical and strategic connection between a person’s, a couple’s or a family’s values with the ultimate use of their wealth.”

Confidence — And ComfortFor most advisors, charitable gift planning remains something of a mystery — what Shiff Boedecker calls “a very esoteric corner” of tax and estate planning.

“Even if advisors are generally familiar with it, they don’t feel comfortable talking about it with their clients,” she says. “I had one advisor who told me: ‘I don’t ask my clients about that. It’s too personal.’ And I said, ‘Wait, you know everything about their finances, their dysfunctional families, their back taxes — and you think giving is too personal?’ I think they’re afraid of being perceived as pressuring anyone to give.”

Industry consultant Mitch Anthony has helped demystify the philanthropic conversation with a workbook for clients called “The Memory Bank: Where the True Riches Are Kept.”

“One of the things I keep picking up is that when people give money, they want a message to go with that money. To hand out a check sort of has an empty feeling for people,” he says. “If you’re going to give anything away, give the story with it.”

Among the questions in the “Work, Wealth & Wisdom” workbook: What principles and ideals have you followed in building your business? What does money mean to you? What do you see as the strengths and limitations of having wealth? If you had all the money in the world, what would you do?

Culver’s advisor training model is built around research from the Roy Williams and Vic Preisser book, Philanthropy, Heirs and Values, which showed that 70 percent of the time, the estate plans of wealthy clients failed within two generations — meaning the money was gone, the family fractured.