Tax-Savvy Giving
As ESG gains momentum, clients are seeking more than just a charitable tax deduction.
Be aware of social consciousness as a rising force in estate planning and wealth management.
Here's why it matters.
Environmental, social and governance (ESG) is the term used to refer to three factors that are increasingly used to measure the sustainability and ethical impact of an investment in a company or business. What's interesting is that this rise in overall awareness of the health of people and the planet has also paralleled an increase in the desire to make wealth matter. U.S. Trust’s 2018 “Insights on Wealth and Worth” survey, for example, found that 47 percent of people in the study had begun to identify a “purpose for their wealth.” What's more, according to Investment News, over the course of a 12-month period, the percentage of Millennials highly interested in ESG investing leaped from 26% to 35%. GenXers' interest jumped from 16% to 35%.
What all of this means to you is that as an advisor, your responsibility to serve your clients now extends beyond an understanding of the tax ramifications of giving to 501(c)(3) organizations. Now, you'll also want to be aware how ESG influences the ways your clients are giving back through their investments, which come with a separate set of tax ramifications.
The net-net is that as the definition of "doing good" expands, your tax savvy radar must expand, too.
HOW WE CAN HELP
Our team is your partner. We understand your responsibilities to your clients from a holistic perspective. It's our job to help you make your clients feel successful as they pursue and achieve a purpose for their wealth, in whatever form that might take.
Creative Solutions
A conversational approach using plain language can ease the barriers to discussing community impact with your clients.
When the time comes to discuss philanthropy with clients, advisors are often left wishing there were an easier way to discuss the results achieved with a charitable gift than simply to rely on aspirational statements such as "Let's be sure your money makes a big difference."
Ask good questions.
The key to engaging in a more productive planning conversation with your clients is to ask more questions. Think about the long list of questions you ask clients when you are advising them on investment vehicles, or drafting estate planning documents! A few good questions can give a big boost to charitable planning, too. Here are a few of our favorites:
What problem raises your eyebrows the most when you read about it in the news?
What are the pieces of the puzzle that would need to come together to solve that problem in your community?
If there were one piece of that puzzle you could put into place with a magic wand, what would it be?
HOW WE CAN HELP
The Community Foundation helps you build a plan based on the answers to these questions and more. For example:
Our team helps you refine the client’s definition of the “community problem” they want to solve.
We work with you and your client to identify practical ways that change could happen and how philanthropic investment can support the change.
We can connect your client with nonprofits that are working in the area of desired change, and identify meaningful and attainable milestones to measure success.
We can advise on what level of investment is appropriate and help identify other likely collaborators to make change happen.