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10 Opportunities To Discuss Philanthropy With Clients

10 Opportunities To Discuss Philanthropy With Clients 10 Opportunities To Discuss Philanthropy With Clients


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A life-changing event can be the perfect way for a financial advisor to broach the subject of philanthropy, Eileen Heisman, president and CEO of National Philanthropic Trust, said at the recent Women Advisors Forum event in California.

“One of the things about talking about philanthropy is it enables you to get into more meaningful conversations” that can touch on estate plans, tax plans and family situations. Heisman said. “The other thing you get to do is ask people what’s really important to them.”

As head of National Philanthropic Trust for 14 years, Heisman said her firm, which manages donor-advised funds, has given away about $1.4 billion and has made about 65,000 grants. Here are 10 opportunities Heisman said every financial advisor can use as a cue to talk about philanthropy.

Shifting Family Dynamics Shifting Family Dynamics

Major family events that spark change can including a death in the family, children reaching adulthood, retirement, marriage or divorce. Those events can also help inspire philanthropic endeavors, Heisman said, after having seen memorials established for the deceased or donor-advised funds created in honor of graduating students.

“Around a family event, you might want to talk about what’s important to you,” Heisman said.

Holding Appreciated Securities Holding Appreciated Securities

“One of the most tax effective ways you can give is to give appreciated securities,” Heisman said.

That can include something a client has bought on a low-cost basis that has since doubled or tripled in value. Instead of selling that asset and paying capital gains tax, a client can donate it to a charity and get a deduction for the full fair market value of the securities. The charity, in turn, sells the asset it was gifted.

Owning/Selling a Business Owning/Selling a Business

Business donations can include closely held stock or restricted stock, Heisman said. But the key is to have all the necessary information ready for a transaction, including documents on details of those assets, while a charity needs to be willing to accept those assets.

“You need to figure out how much lead time do you need, especially if you’re gifting something like a family owned business,” Heisman said.

Owning/Selling Real Estate Owning/Selling Real Estate

Gifting real estate was very popular when the real estate market was growing every year. National Philanthropic Trust has seen gifts of shopping centers and shopping malls. The key, Heisman said, is that the gifted real estate has to be completely paid off with no mortgage.

“You can take an illiquid asset that you would never get paid on, gift it to a donor advised fund, and then the donor advised fund charity liquidates it,” Heisman said. “Then it becomes an investable asset and then it becomes part of your portfolio.”

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Reviewing Paid Insurance Policies Reviewing Paid Insurance Policies

“One of the safer areas is actually to get paid on an insurance policy,” Heisman said, whereby the charity becomes the beneficiaries.

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Establishing/Modifying a Private Foundation Establishing/Modifying a Private Foundation

A donor-advised fund can also serve as an alternative to a private foundation, Heisman said.

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Retiring Retiring

Advisors can also use routine conversations with clients to revisit the subject of philanthropy, including retirement planning, according to Heisman.

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Inheriting Inheriting

A client receiving an inheritance is also an opportunity to check in on potential philanthropic plans.

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Estate Planning Estate Planning

Philanthropic endeavors can be built into a client's estate plan.

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Planning Major Gifts Planning Major Gifts

Gift giving can also have charitable ties.

Click here for more on Heisman's presentation on philanthropy at the Women Advisors Forum.

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