CHARITABLE PLANNING

Joe Mrak

Advisors can bridge the generation gap and help family members find common ground.

NCREASINGLY, WEALTHY CLIENTS ARE DEEMING PHILANTHROPY A higher priority. Last year, our firm, Foundation Source, facilitated more than 50,000 grants for private foundation clients representing approximately $ 1.6 billion in charitable aid, and on the donor-advised fund side of our business we added 2,400 new accounts, processed about 40,000 grants, and deployed more than $ 50 million in charitable aid. Market volatility and policy uncertainty have created a difficult environment for philanthropists to navigate, but we’ re optimistic that digital transformation in the sector will continue to simplify the giving process for advisors and clients, leading to even more charitable capital getting to the places it’ s needed most.

Like many industries today, the philanthropic sector is evolving with the growing global use of artificial intelligence( AI). In a recent survey, the Technology Association of Grantmakers( TAG) found that 81 % of private foundations report some degree of AI usage within their organizations. Individuals are the most likely to be using AI, while it’ s still early days for adoption on the organizational level.

Additionally,“ philtech”— software that supports charitable giving— will continue making philanthropy a more practical, cost-efficient offering, particularly for financial advisors and their high-net-worth clients. For example, advisors can rely more on white-label technology offerings that simplify back-office work like opening accounts, tracking grant requests and payments, managing expenses, and producing reports, so that they can spend more time with clients on strategic planning for their philanthropic missions.

While individual giving is shrinking as a percentage of total giving, foundation giving is up to 19 % of overall giving.

As we partner with financial advisors to help their wealthy clients pursue philanthropy, we’ ve gathered unique insights into charitable giving and how it can help advisors navigate uncertain periods, add value to their service offerings and grow their practices.

Structured Giving

In 2024, the Giving USA Foundation reported that grant-making organizations, including foundations and donor-advised funds, experienced the strongest growth as wealthy donors invest in the future of the nonprofit sector. While individual giving is shrinking as a percentage of total giving, foundation giving is up to 19 % of overall giving, and it crossed the $ 100 billion threshold for the second consecutive year. Donor-advised funds have also gained popularity among donors and advisors for their ease of use and tax advantages— and because a growing number of donors( particularly millennials and Gen Z) want to align their investment choices with their core values and charitable interests.

We also see clients using a combination of vehicles and approaches to drive impact and meet their philanthropic goals. There are several advantages to harnessing more than one charitable vehicle. This approach increases tax benefits and offers donors a greater balance of simplicity and flexibility with autonomy and personalization. There are opportu-

APRIL 2025 | FINANCIAL ADVISOR MAGAZINE | 21