How to Start the Discussion
One of the simplest and most important things you can do to help your clients enjoy the benefits of charitable giving is to ask them the giving question:
“Is there a cause you care deeply for or a community need you would like to have an impact on?
Why raise charitable giving at all?
Your clients are increasing their knowledge about options and expecting you, their advisor, to help them create innovative, comprehensive financial plans that take care of their families and friends, minimize taxes and reflect their values. Confronted with the task of transferring assets from one generation to another, people are increasingly choosing to integrate charitable giving into their planning to realize financial benefits and have an impact on their community.
- Charitable giving can generate significant tax benefits in both annual and estate tax situations – your client may not be aware of this opportunity.
- The ability to provide for a charitable gift often produces a deep sense of fulfillment and satisfaction – your client may be very grateful to you for not only asking the “giving question”, but also helping him/her to grow their personal impact through smarter giving.
- Your client may never have mentioned an interest in charitable giving – perhaps due to a disappointing experience or to lack of information about how charities work or what impact individual donations can have on a problem. You can offer your client an opportunity to become informed without any obligation. Community foundations are uniquely positioned to understand both local needs and local solutions. They can help you serve your client better and provide timely information. Find and connect with your local community foundation today.
- The media has painted a picture of philanthropy that is often out of touch with most Canadians. Your client may think that their personal resources are not sufficient to have any charitable impact. You can show your client a variety of creative ways to make a gift that is compatible with personal and financial circumstances and will make a difference today and tomorrow.
- You’d be surprised how many of your clients are searching for a way to give back to their community, to memorialize a loved one, or simply to do good. Many of them are giving inefficiently both annually and through their estate.
- You live/work in this community too. This is an opportunity not only to serve your client, but also to help your community thrive.
Who is in need of your help?
Recognizing that all clients can benefit from planning gifts in life and through their estate. Canadians who have been identified as having the most need for charitable gift planning are:
- Unmarried individuals without children
- People who are financially comfortable but do not consider themselves to be “wealthy”.
- Married, with no children
- Owners of privately held companies
- Married couples who have independent or older children
- Owners of appreciated securities or secondary real estate
- Surviving spouses
- People with an existing relationship to a cause or community organization
When should you raise the subject of charitable giving?
Your greatest opportunities to help your clients maximize the personal benefits of giving occur when they are undergoing major business, personal and financial transitions, such as:
- sale of a business or other major asset (especially a secondary property);
- estate planning;
- readjusting assets after the death of a loved one;
- writing or revising a will;
- retirement planning; and
- at times of a financial windfall, such as an inheritance, a merger or acquisition.
Circumstances in clients’ lives usually cause them to begin or alter their financial plans, including charitable giving. The following scenarios might signal an opportunity for a discussion about planning and how charitable giving can help achieve their goals.
- Your clients tell you that they are about to take their company public, or that they want to transfer ownership of the family business to the next generation.
- Your client tells you he wants more income from his stock but worries about capital gains tax if he sells.
- Your client discovers he has a large retirement fund which his heirs will receive only some of.
- Your client says she would like to provide income to her mother, sister, niece, or others but still benefit a cause close to their heart.
- Your client shares that they are selling a secondary property like a cottage or overseas residence and that they would like to donate a portion of the proceeds.
- Your clients asks questions about a private foundation which is an older more restrictive way to create charitable impact. Community foundations offer more alternatives to this expensive and time consuming option.
Source: Adapted from a document originally prepared by The Niagara Community Foundation and Huronia Communities Foundation. Used with permission.