How to Have the Philanthropic Conversation

If you’ve been following along with this series for financial advisors, you’ll know that I’ve tried to make the case that your charitable HNW clients want your guidance and help with their philanthropic efforts. This makes sense. As they look to you to help them create comprehensive financial plans, they want those plans to reflect their values, while also achieving their financial goals. We’ve also introduced donor advised funds, a versatile tool that helps you help them do exactly that.

So far so good. But if you’re an advisor who has not yet incorporated philanthropy into your practice, you’re probably asking the question, “But how?” Giving is an incredibly personal thing and it’s normal to be a little nervous about stepping into it. The truth is I know of no better way to deepen a client relationship than to understand why they give and then help them do it effectively. For many who are charitably-minded, their giving is the most important part of their wealth experience, so as their trusted advisor you should absolutely play a role.

The good news is the Philanthropic Conversation, as I like to call it, is exactly that — a conversation. It can be initiated with a few simple questions. And when you ask, I think you’ll be surprised how many of your clients are looking for a way to make a difference, to memorialize a loved one, or to leave a legacy that outlasts them.

Here are some questions that can easily be incorporated into a client review.

Start with this one:

• Are there charitable organizations that you support or causes that are important to you?

No? Fine. We’ve learned something important about the client and can move on to other matters. If the answer is yes, then a few other questions will keep the dialogue going and give you more important information:

• Do you support the same organizations each year or does your giving change?
• How do you decide who to give to?
• Do you donate the same amount each time, or does it change? Why?
• Would you like to give more?
• What donations have given you the most satisfaction?
• Have you regretted any donations? Why?
• Do you involve other family members in these giving decisions?
• What assets do you usually give?

It’s also possible your client has some type of philanthropic plan in place that you don’t know about. You might be surprised, so ask.

• Do you have any giving vehicles, such as a donor advised fund, in place at another institution?

One final question may be useful in helping you craft a plan:

• Do you want to give primarily during your lifetime, or do you want to leave a legacy that outlasts you?

Not all your clients are givers. But for those who are, this discussion will change your relationship in ways that will surprise you.

As their trusted advisor you want to be the go-to resource for all elements of your clients’ financial lives. I maintain that you cannot be that resource unless you include a discussion of their philanthropic interests and goals. This is especially the case with HNW and UHNW individuals, who statistically say that their philanthropy is a very important part of their wealth experience.

Incorporating philanthropy into your advisory practice is good. It’s good for your clients and it’s good for your business. It’s good for our communities and good for the world.

Let me know if we can help.

Based in beautiful Vancouver, Mike is the Director of Charitable Investment Programs for Chimp. He loves the wealth management business but his heart is in philanthropy, so this is his dream job. Mike can be reached at mike.todd@chimp.net