Listening for Charitable Opportunities

Philanthropy is a very personal decision. You can help your clients realize their charitable objectives by listening for charitable giving opportunities, explaining options, and suggesting solutions. Significant giving opportunities often arise when clients are making major business, personal, and financial decisions. Community foundations can work with you and your client to recommend the best charitable solution. Here are some frequent scenarios:

• Year-end tax planning: Your client just earned a large bonus and wants to give a portion back to the community but has no time to decide on the most deserving charities before the end of the tax year. Recommend establishing a Donor-Advised Fund through their local community foundation for an immediate tax deduction, and the ability to stay involved in recommending uses for the gift for years to come.
• Preserving an estate: Estate planning identifies significant taxes going to the IRS, but your client wants to direct dollars for local benefit. The local community foundation can work with you and/or your client to reduce their taxable estate through a charitable bequest or other planned gift. Your client’s gift will create a legacy of caring in the community – forever.
• Retiring in comfort: Your client is concerned about running out of money during their lifetime, but has always been charitable. Recommend establishing a life income gift (such as a charitable remainder trust) at their local community foundation that pays income potentially for life. Upon your client’s death, the gift can be distributed by the community foundation in accordance with their charitable interests.
• Establishing a private foundation: Your client is thinking about establishing a private foundation, but is looking for a simpler, more cost-efficient alternative. The local community foundation can help you and your client analyze the pros and cons of creating a Donor-Advised Fund as compared to a private foundation.
• Closely held stock: Your client’s personal net worth is primarily tied up in a closely held company, but it’s important for them to give back to the community. Recommend establishing a Donor-Advised Fund or planned gift; your client is eligible for a tax deduction measured by the fair market value of appreciated stock (less any planned gift value).
• Sale or disposition of highly appreciated stock: Your client has appreciated stock and wants to use a portion of the gains for charitable giving, but the identified charities are too small to accept direct stock gifts. Suggest establishing a fund at the local community foundation with a gift of appreciated stock. Your client receives a tax deduction on the full market value, while avoiding the capital gains tax. Your client can even be involved in recommending uses for the gift, including the organizations and programs they care about most.
• Sale of a business: Your client owns highly appreciated stock in a company that is about to be acquired. The local community foundation can work with you to suggest several ways to structure a charitable gift (including the use of planned giving techniques) to help your client reduce capital gains tax and maximize charitable impact.
• Strategic giving: Your client is passionate about helping meet a specific community need and wants to make a meaningful gift. You and your client can work with your local community foundation’s grantmaking experts to understand community needs and programs and then direct gift dollars to make the greatest impact.
• Substantial IRA/401k assets: Your client wants to leave their estate to the community and their family and has substantial assets in retirement accounts. The local community foundation can help you and your client evaluate the most beneficial asset distribution to minimize taxes, giving more to their heirs and preserving charitable intent. Your client may also qualify for the Charitable IRA Rollover.

Download a printable PDF about Listening for Charitable Opportunities to keep on hand or share with your clients.