Tips for clients’ year-end giving

Tips for clients’ year-end giving

Year-end giving makes up a significant portion of total revenue for most charitable organizations. Research even shows that a whopping 25% of online giving occurs in December! What this means is that there’s a pretty good chance your clients are already considering end-of-year gifts to support causes they care about, are being asked by at least one nonprofit for an end-of-year gift, or both. That’s why it’s important for you to talk with clients well in advance of the year-end giving rush.

Here are six tips to help jumpstart your client conversations over the next few weeks. Please give us a call if you’d like to dive deeper! We are here for you.

Check in on goals. By discussing your clients’ overall charitable goals, you can ascertain which causes your clients are passionate about and why they care, how much they’d like to contribute in the short term and over time, the impact they’d like to see, and whether they intend to provide for their favorite charities in their estate plan. Against this backdrop, year-end giving strategies become easier to develop.

Explore a wide variety of fund types. Donor-advised funds are very popular vehicles, and the Community Foundation is an ideal provider for clients who want to keep their philanthropy local and benefit from the Foundation’s focus on philanthropy and expertise on local needs and opportunities. But donor-advised funds are not the only types of funds that the Community Foundation offers. We can help you help your clients can also establish field-of-interest funds, designated funds, unrestricted funds, or scholarship funds. We can help you determine the type of fund (or funds) is best meets your client’s needs.

Know how a donor-advised fund works. It’s easy for a client to establish a donor-advised fund at the Community Foundation. After completing simple paperwork, your client will make a tax-deductible gift (of cash or, ideally, stock or other highly-appreciated asset) to the Foundation to fund the donor-advised fund. The funds can then be granted out to eligible charities at the client’s recommendation over time. Many clients find that a donor-advised fund operates almost identically to a private foundation, but without the sometimes hefty administrative overhead costs and burdensome restrictions. A donor-advised fund can be named after the client (e.g., Smith Family Fund) or named to reflect the purpose of the client’s giving (e.g., Grant County Health Endowment), or even structured to enable the client to give anonymously.

Supercharge both tax benefits and giving. Giving through a donor-advised fund at the Community Foundation may allow a client to tap a helpful technique called “bunching,” which maximizes the client’s itemized deductions for the tax year, while still ensuring that the client can give strategically over the next few years to achieve charitable goals and support favorite organizations when they need it the most.

Don’t default to cash. Many clients naturally think of cash as the source for their year-end giving. That’s a missed opportunity! Most of the time, highly-appreciated marketable securities (or other highly-appreciated, long-term assets) are a better gift to a client’s fund or other public charity because the client is eligible for a tax deduction at the assets’ fair market value, and the proceeds from the sale of the assets will flow into the client’s fund free from capital gains tax. That means more funds are available to support the client’s favorite causes.

Philanthropy is an important topic of conversation with your clients any time of the year, but more so as we approach the end of the year. We are here to provide the information and resources you need to help your clients meet their financial and charitable goals today and into the future.

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