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Twenty Charitable Planning Questions for the Holidays

Family gatherings are a good time to raise these issues.

During the fourth quarter, advisors frequently discuss charitable giving with their clients. Advisors have learned that this conversation is beneficial to clients and their families, as well as to their own relationship with the clients. As part of this process, advisors often encourage their clients to engage their families when they are all together.

Each year, the American Endowment Foundation (AEF) donor-advised fund (DAF) shares with our donors a list of questions that can help start or continue the family philanthropy conversation. This helps donors plan their giving strategy for both the short and long term.

Each family situation is different. For some, the conversation is very natural and comfortable, while for others, it can be more challenging when there are strong differences and philosophies. Charitable planning isn’t a one-time event, as most philanthropic families discuss this annually or on an ongoing basis.

Usually, families want to initially have this discussion themselves, but there can be benefits to including a trusted family advisor who has knowledge of the financial, legal or tax aspects of charitable giving.

Twenty Questions

The following are some questions AEF provides to our donors and their advisors:

  1. Why is philanthropy important to our family? What’s our motivation for giving?
  2. What’s the history of philanthropy in our family? Who’s been involved as a volunteer or donor? Who’s worked in the nonprofit sector?
  3. How involved do we want to be with our giving? Should we volunteer, serve on a board, go on site visits, attend conferences, collaborate with other donors or just send in donations?
  4. Which causes and charities are most important to each of us and why? Should we create a charitable giving mission?
  5. Are there new areas of interest to anyone in the family?
  6. Should we donate as a group, or is it OK to give separately?
  7. Do we want our giving to be concentrated in the near future, throughout our lifetimes or for generations to come?
  8. Who wants to be involved, now and later? Who will be in charge of family giving in the future?
  9. Do we want to support many or few charities, large or small ones?
  10. Do we want to be public or private with our giving?
  11. Should we plan and manage our giving ourselves, or would it be helpful to bring in charitable giving experts to help?
  12. Are there particular assets that we own that nobody will want in the future that can be donated to a charity or DAF account? Once donated and sold, should that be used as the basis for our giving in the future?
  13. How should we decide how much to give, and who will coordinate with our financial advisor and CPA so we get the maximum tax benefits?
  14. Which past donations have provided us with the greatest satisfaction or regret?
  15. Are there any charitable beneficiaries named in the estate plan? Shall we include some? Is a charitable legacy important to us?
  16. Does the family have any charitable vehicles currently, and are there any challenges with them? Are there simpler and less expensive options such as DAFs?
  17. Are we donating, or should we donate, the required minimum distributions (RMDs) from our individual retirement account to charity rather than pay taxes on the RMDs? Should we donate our traditional IRA to our DAF or other charity at death to avoid the significant taxes that would need to be paid if it is passed down to the children?
  18. Are we fully aware of the advantages of donating assets other than cash?
  19. What concerns does anyone have about our charitable giving?
  20. What are the benefits and impact of our giving?

Role of Advisors

Usually, these initial conversations will generate awareness, understanding, purpose and unity. If there’s little agreement or understanding about how to proceed, advisors can often step in to help. When there’s been a liquidity event and the family is just getting started on its philanthropic journey, or the family’s philanthropic efforts have been stuck in neutral or reverse for some time, an outside philanthropic advisory firm can be brought in to work with the family and help complement the work of the family’s financial, tax and legal advisors.

Though clients may not have a pressing issue pertaining to charitable planning that needs to be immediately discussed with family and heirs, it’s always easier and more impactful when these conversations take place ahead of any unforeseen event. Clients who’ve never had this discussion often later wish they had done so previously, while the positive impact on their families when they plan in advance, as well as on the causes and charities they care about, can be significant.

Ken Nopar is the senior philanthropic advisor for the American Endowment Foundation donor-advised fund.

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