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Financial Planning > Charitable Giving > Donor Advised Funds

20 Charitable Planning Questions Clients Can Ask Over the Holidays in 2021

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What You Need to Know

  • The pandemic and other events have caused some clients and their families to reconsider their charitable priorities.
  • Advisors can be very helpful in helping families plan how, when and how much to give.
  • Making grant recommendations as early in the year as possible is very important.

More families will be able to celebrate the holidays together this year than last. Though gathering via Zoom last year was better than not gathering, getting together in person this year will enable families to have more meaningful conversations about their charitable planning for this year and beyond. 

The pandemic and other events have caused some clients and their families to reconsider their charitable priorities over the past few years. Fortunately, during these times of great need, donors, especially those who have donor-advised fund (DAF) accounts, have responded generously. American Endowment Foundation DAF donors granted 30% more to charities in 2020 than in 2019 and have already granted 50% more this year. Other DAF sponsors report increases as well.

Some families or individual family members may wish to continue to support the same organizations that they have always supported, while others have already changed direction and supported new causes or charities, adjusted the amounts they granted out to their usual grantees, or want to make additional changes going forward. Though there may be differences between family members, philanthropy can often help to keep them united. 

Usually, families want to have this discussion themselves, but it may be beneficial to include a trusted family advisor who has knowledge of the financial, legal or tax aspects of charitable giving. There have been many tax law changes that affect charitable giving in recent years and this year is no different, so advisors may want to talk with clients before or during the family gathering since this may be very helpful. 

Because of the challenges family members and society have faced this year and last, this year’s charitable planning conversation may be more important and relevant than ever before. This may be the ideal opportunity for clients to engage children or grandchildren who have not previously been interested or involved.

Some questions that clients can ask this year when together include: 

  1. What is the history of philanthropy in our family? 
  2. Why is philanthropy important to each of us? What is our motivation for giving?
  3. How involved do we want to be with our giving? Should we volunteer, serve on a board, go on site visits, attend conferences, collaborate with other donors, or just send in donations?
  4. Which causes and charities are most important to each of us, and why? 
  5. Are there causes and charities that we have supported in the past that are no longer as relevant? Are there any new ones we should support?
  6. Which past donations have provided us with the greatest satisfaction or regret? 
  7. Should we have one charitable mission and donate as a group, or is it OK to give separately?
  8. Do we want the bulk of our giving to be in the near future, throughout our lifetimes, or for generations to come? 
  9. Who wants to be involved, now and later? Who will be in charge of family giving in the future?
  10. Do we want to support many or few charities, large or small ones?
  11. Do we want to be public or private with our giving?
  12. Should we plan and manage our giving ourselves, or would it be helpful to bring in charitable giving experts to help?
  13. Should we change the amount we donate this year? Does the growth of our investments or success in our business enable us to give more this year?
  14. Have we talked with our financial and tax advisors so we get the maximum tax benefits? Is everyone fully aware of the advantages of donating assets other than cash?
  15. Are there particular assets (real estate, family business, collections) that we own that nobody will want in the future that can be sold or donated to a charity or DAF account? Can that be used as the basis for our giving in the future?
  16. Does the family have any charitable vehicles currently, and are there any challenges with them? Are there simpler and less expensive options such as DAFs?
  17. Are there any charitable beneficiaries named in the estate plan? Shall we include some? Is a charitable legacy important to us?
  18. Should we donate the required minimum distributions from our IRA to charity (DAFs and Foundations not eligible)? Should we name the DAF as the charitable beneficiary of the IRA at death instead of the children to avoid significant taxes? 
  19. What concerns does anyone have about our charitable giving?
  20. What has been and will be the impact of our giving? How can we evaluate this impact?

It’s always beneficial for families to have these conversations on a regular basis. Advisors can be very helpful in helping families plan, perhaps not necessarily where to give, but how, when and how much to give. 

And though it is already late in the year, making grant recommendations as early as possible is very important. Many families have shifted their grantmaking to spring, summer, or early fall since charities need their donations throughout the year. The challenges many individuals and charities face remain substantial, yet the opportunities for philanthropic families to make a difference are great as well.

Ken Nopar is the vice president and senior philanthropic advisor for the American Endowment Foundation donor-advised fund. Founded in 1993, AEF is the sixth largest and the leading independent DAF sponsor, working with 10,000 donors and their tax, wealth, and legal advisors in all 50 states.  


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