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How I Plan to Raise $10B for Charity

A convergence of factors creates a tsunami of opportunities for advisors to demonstrate their value.

When it comes to charitable giving, I’m pleased to say the pace of change has been accelerating. And that’s one thing in life I don’t mind if it keeps going up.

It took me the first three decades of my career to facilitate $1 billion in charitable giving. But I’ve done almost that much in the past four years since I announced my audacious goal of raising $10 billion for charity before I call it a career. I’ve never been accused of thinking small. Instead of striving for 10% or 20% growth every year, why not shoot for 10X exponential growth to borrow a page from Strategic Coach Dan Sullivan? I also am very aware that I can’t do this alone. That’s why I’ve enlisted many fellow professionals to join me in my efforts.

What’s Driving the Charitable Giving Boom?

While studies show charitable giving and the number of donors has declined in recent years due to economic headwinds and geopolitical uncertainty, that’s mainly at the mainstream level. I can assure you that’s not the case at the higher end of the wealth spectrum, where most of your clients reside.

There has been a convergence of factors at play, including higher tax rates, record numbers of boomers reaching retirement age, general discouragement with how the government spends our money and more people thinking about their legacy since the pandemic took the world by storm. And then there’s the unprecedented transfer of wealth between the generations and the sunsetting of the generous gift and estate exemption in late 2025. That’s not something the average American thinks about, but your clients do – or should be doing.

Philanthropy has long been part of U.S. tax law for a reason. The government knows it can’t finance everything for society so it subsidizes philanthropy to enable non-government organizations (NGOs) and successful people to assist in areas that the government can't focus on or finance.

Unfortunately, there’s a very narrow band of people interested in (and proficient at) philanthropic planning. That’s where you come in.

Some of the some of the brightest people in the planned giving space are aging out of the profession, and I don’t see much new talent coming in to replace them. Thanks to the 2017 Tax Cuts & Jobs Act, which substantially raised the gift and estate tax exemptions, we have a “lost generation” of advisors who think that only ultra-high-net-worth people need estate and gift planning. I get it. But all that’s going to change after 2025 and you need to be ready (more on that in a minute).

How to Move the Needle

Any advisor in discussion with a family can help them identify things they care about and facilitate their ability to make an impact. As you get to know your clients better, you’re in a great position to help them articulate their own belief system and the issues they see in society that they might want to change.

Meanwhile, record numbers of boomers (and boomer business owners) are exiting their businesses. The tax impact of those big liquidity events can be ameliorated or erased completely with the right charitable planning in place.

Real-World Example

One of our clients, who built a very successful consumer-facing service business, was finally ready to hang up his tool belt and sell the company. Thanks to his grit and perseverance the business had grown so large that it became attractive to a national suitor.

In the course of helping our client negotiate a $30 million exit and sale, we identified a portion of his assets that could be transferred to a charitable trust pre-sale. Ultimately, we not only achieved a charitable income tax deduction that offset much of the owner’s non-charitable sale, but we saved him long-term capital gains tax on $10 million (in California). That full $10 million will now provide $400,000 of annual tax-free income to our client’s family before it goes to support their charitable desires. It was a win for our client, a win for the charity—and a big loss for the IRS.

Overcoming Learning Obstacles

Someone asked me the other day what I thought were the biggest changes I’ve seen in the planning profession since I started my career. If nothing else, I’ve noticed a lot less patience for comprehensive planning and more and more emphasis on gathering assets under management. We’re so busy managing our businesses for growth we don’t take the time to get to know our clients very well. We don’t understand them as well as we used to, which makes it harder to dig into what they really want to do with their lives.

Unfortunately, the assets-under-management model doesn’t make that as possible as it does for “old school” guys like me who charge actual fees to do planned-giving work. The same thing has happened in the legal profession. As mentioned earlier, the generation of estate attorneys who were good at complex legal work has largely aged out of the profession. The newer generation hasn’t been incented to learn the nuances of complex planning because the estate exemption has been so high since 2017. There’s a huge knowledge gap in both financial and legal professions. It’s shocking how many financial professionals call me up and don’t know anything about what a charitable remainder trust is. If they understand a basic donor-advised fund (DAF), they consider themselves proficient. Really!?!

I know we’re in the Amazon/Netflix convenience economy, but too many advisors are looking for quick fixes and “hacks” when it comes to planned giving. Too many advisors tell me they’d like to learn more about planned giving, but they worry about loss of income if their clients’ assets migrate out of the portfolios they manage and into the arms of charity. Again, that’s just a lack of education.

The right planned giving tools enable you to keep your client’s assets with you for a very long time – all while helping the causes they believe in. There are some charitable trusts that may run for two or three generations. Most DAFs can go down generations. Pooled-income funds can operate for multiple generations. Charitable lead trusts often go for a lifetime, and the money gets locked up forever. With all of these vehicles, you keep a larger amount of money in the family. What most advisors don't understand is that when clients give their money to a charitable gift, you're not necessarily losing the money management.

Doing good for your clients while doing good for society. If that sounds promising to you, then make a commitment this year to incorporate philanthropic planning in your practice. There are plenty of resources online, as well as The American College’s Chartered Advisor in Philanthropy Program. Reach out to me any time if you’d like more guidance.

The opportunity of a lifetime doesn’t come around often. When you think back on your legacy and career, how will you answer the question: “Where were you during the Great Wealth Transfer of the 2020s?” I welcome you to join the 10BC initiative.

Randy A. Fox, CFP, AEP  is the founder of Two Hawks Consulting LLC. He is a nationally known wealth strategist, philanthropic estate planner, educator and speaker. 

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