While financial advisors often recommend a charitable vehicle for their philanthropic clients as part of their overall wealth management strategy, an article in foundationsource.com notes that donors have different “giving styles“. As Indiana estate planning attorneys, we realize that many aspects of the estate planning process are not at all about death and dying, but about making a social and personal impact – by “giving back”.
There are many considerations which go into a client’s decision about charitable giving, including:
How open?
How “known” does the donor wish to be? Do they want to personally deliver their gift to the charity or just “mail it in”? Do they want to participate in fundraising for the charity, or, at the other extreme, remain anonymous?
How flexible?
How flexible does the donor want to be in their charitable planning? With a Donor Advised Fund, donors can contribute assets and decide later which charities to benefit.
Do donors intend to involve family members? With both donor-advised funds and private foundations, this is possible.
How cost-conscious?
Are administrative and investment fees a big factor in the donor’s charitable giving decisions? Donor-advised funds have low start-up costs, foundationsource.com points out, while private foundations have higher costs. While, as Indiana estate planning attorneys, we offer no tax advice, instead working together with our clients’ tax and financial planning advisors, we find that charitable giving is an important element in many of our clients’ overall estate plans; many are interested in taking significant deductions in their Federal Income tax bill.
How short or long-term focused?
To what extent is the donor focused on contributing towards current-day needs (post-disaster rescue efforts, poverty relief, veterans’ needs,etc.), as opposed to effecting long term assistance?
In both charitable and estate planning – it’s often a matter of style.
– by Nicole Eckert. Attorney with Geyer Legal Group
