If you’re not talking about charitable giving with your high net-worth clients, 2024 is the year to start doing it! Recent studies show that 85.1% of affluent households give to charity. Certainly, many of your clients are among them. Take a few minutes this month to scan your client list for three common scenarios and related opportunities for charitable giving solutions.
You’re probably aware of a few clients who increased their charitable giving at the end of 2023. Perhaps you worked with a client to establish a donor-advised or other philanthropic fund at the Foundation. Alternatively, you helped a client structure a Qualified Charitable Distribution to a field-of-interest or designated fund at the Foundation. Now that the dust has settled on year-end planning activities return to these clients to learn more about their overall philanthropic plans. You may discover that a client would like to work with you to update their estate plan to include a bequest to their fund at the Foundation, set up a charitable remainder trust with highly-appreciated stock, or proactively plan their charitable gifts for 2024 to get a jump on tax strategies.
2023 brought good news and record highs for the stock market. As always (and perhaps especially now!), giving appreciated, publicly traded stock to charitable organizations is a highly effective tax strategy. This is because capital gains tax is avoided when your client transfers long-term, marketable securities to a fund at the Foundation or other public charity. The client is typically eligible for an income tax deduction at the securities’ fair market value. When the charity sells the securities, the charity does not pay capital gains tax. This is a win-win for your client and the charity. Scan your list for clients holding long-term stock positions that have appreciated substantially since they bought them, especially with the market’s latest rally.
Children of affluent parents tend to move away. This means many of your clients may seek ways to stay in close communication with their children. Remember that while the Foundation can help your clients maximize the impact and tax benefits of their local giving, the Foundation’s tools are also very geographically flexible. For example, your clients can use their donor-advised fund to support 501(c)(3) organizations across the country, including in communities where their grown children are living. When you demonstrate your interest in your clients’ charitable giving priorities, you not only are strengthening your client relationships, but you’re also helping clients strengthen relationships with their children.