Council Post: Philanthropy: Four Steps To Giving Strategically

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Sandra L. Bragar, CFP®, Managing Director – Planning Strategy & Research, Partner at Aspirian,

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One of the more fulfilling parts of my role as a wealth manager is assisting clients to achieve their philanthropic goals.

Whether they want to make small, occasional gifts as part of their normal budgeting or create larger, legacy-building programs for their excess wealth, helping clients live their passion and fulfill their mission is rewarding.

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There are personal and financial benefits to being strategic with your approach to philanthropy.

On the personal side, studies have shown philanthropy can make people happiest and live longer, It also offers a forum for sharing and honoring family history and values. Adding to that, it provides deeper meaning and purpose to your financial wealth. Most of all, it allows you to support your community and the causes that matter most to you.

Financial benefits include charitable income tax deductions, estate tax reduction, financial literacy for rising generations of your family and helping rising generations build the skills needed for future roles in family wealth.

When it comes to strategic philanthropy, there is no one right way to proceed. As long as you have a clear vision, you can create a strategy to achieve that vision for years to come.

Here are four steps to getting started.

1. Determine your philanthropic goals and purpose.

First, articulate why philanthropy is important to you and what values ​​drive you. Maybe you’re inspired to continue a family tradition; you’re wanting to give back to the community that has served you; you’re looking to live the teachings of your faith; or you want to home in on a specific issue.

Next, determine the time frame for your giving. Do you want to give during your lifetime only or do you want the giving framework to extend beyond you to the rising generations of your family?

Be specific. All that you identify here will become the foundational North Star that will guide your strategy.

2. Craft your philanthropic mission.

The philanthropic mission statement memorializes the purpose of your giving and your values ​​to help you to stay on track in the years ahead. It leads to more focused giving and helps you to say no to the myriad grant requests you will receive for causes outside the scope of your mission. Over time, it provides a reference point to assess your accomplishments and brings meaning to your philanthropy. And while it is meant to keep you on track, it should also be a living document that you thoughtfully amend as your interests and focus change.

We often review a client’s philanthropic mission statement at the outset of each meeting, update it as necessary and insist all their other advisors read it so everyone is aligned with the mission.

3. Fulfill your philanthropic mission.

Now it’s time to decide what philanthropic giving method will work best to achieve your mission. Options include:

, Direct gifts to charities or individuals.

, Donor-advised funds (DAF).

, Private foundations.

, Charitable trusts.

, Qualified charitable distributions (QCDs) from your IRA.

You can also fulfill your mission through your investment choices, such as sustainable investing, as well as volunteering time and serving on nonprofit boards.

This is the fun part where you can be creative by applying your professional skills toward your mission. We have a client who funds marketing services through their foundation to other nonprofits. Another client, a retired Silicon Valley CEO, serves on the board of an organization that mentors entrepreneurs, and the mission of the client’s family foundation is to end poverty and protect the planet specifically through entrepreneurship.

4. Articulate the impact you aim for.

Finally, begin to choose the organizations or projects you want to support. There are thousands of charities and causes out there. Narrow down your options by leveraging your mission statement and visualizing the impact and level of control you want to have.

Start by thinking about how you wish to help the areas covered by your mission. Do you want to address current and immediate needs or create long-term effects? Do you want to focus on a specific project, such as renovating and promoting a community center, or give to individuals and organizations that will spread your donations further?

Then, how will you assess the results? When clients start giving large amounts, they want to be assured that the funds are being well spent toward their specific mission. So think about how often you want to be updated on the progress or success of a program. Do you want qualitative or quantitative data? Would you like to see external evaluations and auditing? Having these answers in mind will help you to identify the right projects and organizations that will partner with you in the manner you prefer.

Integrate philanthropy into your legacy planning.

However you choose to proceed, consider your philanthropic giving strategy as part of your overall legacy planning goals. I advise revisiting your giving strategy annually, looking ahead three to five years, in partnership with your wealth advisor and estate attorney to make sure you’re achieving the impact you’re aiming for.

Be sure to understand the financial impact on your estate as well as the impact on the causes you are supporting. Consider if there are opportunities to pass financial skills and knowledge that will help your beneficiaries manage the philanthropic assets you plan for them to steward.

Also, routinely reflect on your most fulfilling gifts and celebrate the successes. Bringing family and friends together to share the joys and accomplishments of your philanthropic efforts is rewarding and helps to keep your mission and your legacy alive.

The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.


Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?


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