Many of our donors begin their charitable conversation with a professional advisor: their attorney, estate planner, financial advisor or accountant. Professional advisors are key stakeholders helping the Community Foundation of the Northern Shenandoah Valley make philanthropy happen. One of our primary roles is to offer support and solutions that help professional advisors provide top-quality service to their clients linking those clients to effective charitable options.
We work with professional advisors and their clients, helping donors to achieve their charitable goals in such a way as to give now and/or planned giving options. For donors, we make philanthropy easy and flexible, providing personalized services and access to our knowledge of our community. This includes everything from identifying critical issues affecting our region today and high performing nonprofit organizations addressing those issues.
Much charitable giving is done at the end of the year as people begin to realize they need to lower their taxes, avoid capital gains, or make the mandatory distribution from their private foundation. Establishing a donor advised fund at the Community Foundation is an easy and efficient solution for your clients who are facing one or more of these common year-end problems.
Some advisors are reluctant to talk about charitable giving with their clients and may be concerned about appearing to make a value judgment, especially if the client has not expressed charitable intentions. However, by not broaching the subject, a significant opportunity may be lost for your clients and the community. In fact, many individuals expect their professional advisors to bring up the subject if appropriate.
Professional advisors often ask us for our advice on how to begin a discussion about charitable giving with their clients. We suggest asking every client the following questions:
- Are there charitable organizations that you support on an annual basis?
- Would you like to include any of these organizations in your financial or estate plan?
- If there were a way to shift dollars from taxes to charity, would you be interested in exploring the options?
If the answer to any of these questions is “yes,” then you have opened the door to a deeper conversation that can lead to more meaningful planning and a stronger client relationship. Some follow up questions to consider are:
- What are the issues, causes and charities that you feel passionate about? Why?
- How would you prioritize them? Why?
- Which of your past charitable gifts have given you the most satisfaction? The least? Why?
- Given your other commitments, how much time do you have to devote to charity?
- What level of recognition and visibility do you want or expect?
- To what extent would you like to get your family involved in your giving?
- How much wealth do you want to leave to your children and grandchildren? If there is excess, would you consider designating it for charity?
- Would you prefer to give during your life or after your death?
- What values would you like to pass on to your descendants?
- How would you like to be remembered after you are gone? Would you like to leave a charitable legacy to perpetuate those memories?
Are there options if my client cannot afford to part with assets or income at the present time?
Absolutely. Your client can make a bequest through a will or retirement fund. Your client can also select a charitable gift annuity or charitable remainder trust, which provides income and current year tax deductions.
Can my client’s family stay involved in the fund?
Most definitely. With a donor-advised fund, your client can include specific family members or friends by naming them as donor advisors who recommend grants from the fund. When establishing an advised fund, your client may add up to one succeeding generation as donor advisors.
My client (or my client’s family) already has a private foundation. Can they move that over to your community foundation?
Yes. There are some legal and administrative requirements for doing this, but it is done all the time throughout the country. This can be an especially attractive choice for a private foundation that has existed for two generations or more and the current generation is no longer as interested in administering the private foundation.
Are there other estate planning tools my client can use to create or contribute to a fund?
Yes. We can work with you and your client for maximum tax advantage by making their fund the beneficiary of: a charitable lead trust; a charitable remainder trust; a bequest through their will; an annuity or other life insurance policy; or an IRA.
Is setting up a fund the only way my client can use the Foundation to help our community?
No, not at all. Consider these additional options:
- Your client can give any amount of money at any time to an existing fund to help it achieve its charitable purpose.
- Your client may give an unrestricted gift of any amount at any time to the Foundation’s Operating Fund to support the work of the Foundation in the community. This may be used for any purpose, including administrative overhead, grant making, educational events, etc.
- Your client may also give a gift of any amount at any time to our Unrestricted Grants Fund or our General Endowment Fund. Grants from these funds are used to meet community needs identified by the Foundation board.
- Your client may join with others who share their charitable interest and let the Foundation help them create a movement around that interest.
- Note: talk to us about your client’s charitable desires. They may not feel they have a great deal to give, but we can often help them accomplish those dreams by finding others who share that with them. And remember, it doesn’t take a lot of money to make a difference.
Does my client need to let us know if they have included the Community Foundation in their will or as a beneficiary of other giving they have in mind?
No, but there are significant advantages to letting us know. They include:
- It allows us to have a conversation with them and you about their intent and wishes for their gift in the future. Often, we draw up a Memorandum of Understanding for a Fund that will not be activated or funded until after a donor’s death, but your client will have the peace of mind knowing that their wishes will be carried out.
- It provides you, your client, and the Foundation with the chance to set things up in accordance with all laws and regulations to most effectively ensure that their wishes are carried out. We work regularly with the legal department of the National Council on Foundations to ensure that we are in compliance.
- It provides further documentation of their wishes in the event anyone should contest their will.
- It helps us with our own planning so we can more quickly and effectively implement their gift when we receive it.
When should my client consider establishing a Charitable Remainder Trust?
A charitable remainder trust, with the Foundation as its beneficiary, is ideal when your client needs their current assets now to live on but wants to use some or all of whatever remains after their death and their estate is settled to benefit the community in whatever way they instruct. By using the Foundation as a vehicle for this, you and your client can be assured that their wishes are carried out without an administrative burden to the executor of their estate or their family.
When should my client consider establishing a Charitable Lead Trust?
A charitable lead trust, with the Foundation as its beneficiary, is ideal when your client has assets that they don’t need right now but wants the assets to go to their heirs after their death or after a specified period of time. The income from the trust goes to the Foundation (to be used for charitable purposes as your client specifies) during the period of trust, after which time the trust is dissolved and distributed to their heirs as designated when they establish the trust. This is a wonderful way for a client to benefit their community or favorite charity during their lifetime or for a specified period of time without depriving their heirs of inheritance. By using the Foundation as a vehicle for this, they can be assured that their wishes are carried out without an administrative burden to them or their family.