Year End Charitable Giving

It’s raining in Vancouver, which means autumn is here and our thoughts turn to… year end charitable donations.

If you’re a financial advisor you know that the end of the year is already a busy time. And those looking to make a charitable donation before the year ends can add to the workload. From your philanthropic clients who really meant to support that charity earlier in the year but never seemed to get around to it, to those who have had a spike in income this year and need the tax receipt, this is the time of year when these last minute donations seem to come up.

Those who have been following this series already know that I believe a donor advised fund (DAF) can be an extremely effective and strategic charitable giving tool. One of the many benefits of a DAF is the role it can play in eliminating these last minute stresses.

What follows is a partial list of candidates for a (DAF):

1. Clients who make multiple donations annually and would benefit from having one account to track all gifts, tax receipts, etc.
2. Clients who have experienced a significant liquidity event this year. Perhaps they’ve had an exceptionally high income year, have sold a business or other major asset that will generate a large capital gain, etc.
3. Clients who want to receive a tax receipt this year but want to give to charity the following year.
4. Clients who would like to eliminate substantial capital gains liabilities. When appreciated securities are donated, the capital gains tax owed on those securities is eliminated.
5. Clients who would like to provide substantial funding to a smaller charity. Often a large gift can overwhelm a smaller organization, whereas a series of smaller, regular gifts would be extremely beneficial to the same organization.
6. Finally, clients who have a track record of calling your office on New Year’s Eve looking to donate appreciated stock for a current year tax receipt!

If you haven’t already done so, make this the year you incorporate donor advised funds into your practice and minimize year end requests. Once your clients have a donor advised fund set up, you can discuss additional donations as part of your regular review earlier in the year as opposed to responding to their panic at the last minute. You will increase your value to your charitably-minded clients and eliminate some year end stress.

Previous articles in this series:

Why Should a Financial Advisor Care About Philanthropy?

How Donor Advised Funds Will Enhance Your Wealth Management Practice

How to Have the Philanthropic Conversation

Which is Better: Donor Advised Fund or Private Foundation?

From Private Foundation to Donor Advised Fund: Quicker Than You Think

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