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Intelligent Charitable Planning: The Next Big Thing in Wealth

Intelligent Charitable Planning: The Next Big Thing in Wealth

Advisors, Employers and DAFs Can Make Everyone a Philanthropist

By Cor Hoekstra, TIFIN Give

 

Research shows that given the means, most people want to leave a legacy and contribute to causes that are important to them. However, few have access to sophisticated giving vehicles – they are limited to one-time or recurring donations to hand-selected charities. Advisors have the relationships, tools, and mindset to support long-term giving, but few are leveraging those advantages for charitable giving.

Meanwhile, Donor Advised Funds (DAFs) have been around for nearly a century and can help solve the problems of the mass affluent who want to leave a legacy, but they are underutilized and obscure. At TIFIN Wealth, we see the DAF as the vehicle and have built the tech infrastructure around it to make DAFs a valuable part of the advisor toolkit, putting more control in the hands of people who use them and laying the foundation for community-oriented giving.

What is Community-Oriented Giving?

The power of giving rises greatly when it is a community experience and DAFs are well suited to support this approach to philanthropy. Multiple people can give to a DAF, making it the perfect way for a family to unify and coordinate its giving.

This same benefit can extend beyond families and households to other types of communities, too. Just as social media has allowed like-minded people to find each other to share knowledge, a DAF paired with community-building tools can allow any group – co-workers, neighbors, club members, etc. – to support common causes while providing all the tax and legacy-building advantages of a DAF (like giving in a specific year for the tax benefit and then letting that money grow through investment before contributing at a later date).

Charitable Giving in the Workplace

For many working-age individuals, their employer is one of the most important communities they belong to, or at least where they spend much of their time. By evolving the workplace community into an accelerator for charitable giving, we can bring more people into the world of philanthropy. 

The partnership we announced recently with Morgan Stanley at Work is a perfect example of this new vision: Morgan Stanley will now offer DAF access as a workplace benefit that employers can give to their employees alongside 401(k)s and health spending accounts, making philanthropic planning more relevant for people across different earning thresholds.

The opportunities for employers only grow from there. They can offer employee matches on contributions, create “Charitable Spending Accounts” that set aside a certain amount for gifting each year, and let employees build tech-enabled communities around their giving interests.

In a world where people are passionate about causes and looking for ways to make a difference, these giving-centered benefits can be a key to attracting and retaining talent.

Good for the World, for People, for Advisors

These same insights have also driven the solution we are rolling out for advisory firms. Offering a DAF as part of a comprehensive financial planning package can allow advisors to involve themselves in the giving process like never before, empowering them to attract new clients and deepen existing relationships through engagement around causes and issues that matter to their clients. 

In speaking with clients, advisors can point to the foundational principles behind our solution:

  • Building Community: Engaging family, friends, and others in the giving process strengthens human connections while providing greater impact.
  • Enabling Empact in Many Ways: Contributions to charities help the world, investment growth multiplies impact, and community connections enrich the lives of those giving.
  • Simplified Experience and Benefits: A tech-enabled DAF makes it easy to optimize tax impact, has no minimums, and allows the advisor or firm to manage the program – the same trust that people give to their advisors with regard to their investments.

Finally, there are practical benefits to advisors. In addition to strengthening relationships and increasing share of wallet, it keeps those invested funds within the advisor’s preferred vehicles. This allows the advisor to continue managing those assets as well as capture fees that would otherwise be paid to a third party. It also uses tools that make the end-to-end experience easier and more intuitive for clients – for example, TIFIN Give’s solution uses AI to research charities, align giving with investing, allocate giving funds to family members, and more.

We maintain that charitable planning can – and should – be a pillar of the advisory experience just as retirement planning is today. From an advisor perspective, the same skills apply – talking about long-term goals, the impact of long-term planning, and directing investments.

In much the same way that long-term financial planning has transcended the realm of the rich to become accessible to the masses, so too can charitable planning. We’ll help make it happen.

To learn more about TIFIN Give, schedule time with our team today.