CHARITABLE PLANNING

Hannah Shaw Grove

There are both emotional and rational benefits of holistic advice , which should include philanthropy .

HE “ HOLISTIC ” APPROACH TO FINANCIAL PLANNING HAS gained a foothold in the wealth management industry in recent years . While on the surface , “ holistic ” is arguably just a modern-day buzzword , the notion of considering all aspects of a person and their individual circumstances has always been important for RIAs . Extending your offerings beyond traditional investment advisory expertise and taking the bigger picture into account allows you to deepen existing relationships by getting to know clients on a more personal level .

In practice , philanthropic planning is a natural area to extend to ; in discussing clients ’ charitable goals , you ’ re likely to uncover their interests , passions and values for themselves and their families . In turn , you ’ ll gain a more well-rounded understanding of their needs so that you can provide better , more targeted services .

Philanthropy : A Key Component Of Holistic Wealth Management

As it stands , charitable giving isn ’ t widely considered an essential element of wealth management . For instance , while research of wealthy investors shows that nearly 74 % consider themselves charitable or very charitable , 73 % have not received formal philanthropic guidance . Such incongruity underscores the tremendous untapped opportunity that philanthropy offers wealth advisors to expand and enhance their practice to offer more holistic guidance . Consolidating and coordinating all aspects of one ’ s financial picture , from investment philosophy , tax savings , wealth preservation and asset growth to

While research of wealthy investors shows that nearly 74 % consider themselves charitable or very charitable , 73 % have not received formal philanthropic guidance . personal goals , charitable aspirations and family dynamics , can yield valuable insights and create efficiencies in planning .

Recognize Both Emotional And Rational Aspects Of Philanthropy

Let ’ s first define what we mean by “ emotional ” versus “ rational ” when it comes to philanthropy and wealth management . Essentially , it means weighing the “ feel good ” benefits of giving ( e . g ., effecting positive change in the world , uniting members of a family around a charitable cause , pursuing a personal passion ) with the financial benefits ( e . g ., tax savings , wealth transfer ).

Depending on the interests and preferences of advisors and clients alike , wealth management plans — if they include charitable giving at all — typically skew heavily to the rational ( financial or tax ) benefits . These benefits can be significant , especially when donations are made to a formal charitable giving vehicle such as a private foundation or donor-advised fund offering attractive deductions .

However , there are many emotional benefits of philanthropy that affluent clients may also find appealing , especially clients whose families enjoy multigenerational wealth and place importance on creating a meaningful legacy . Also bear in mind that younger next-gen clients , having come of age amid an intense focus on things like sustainability , mental health , social entrepreneurship , and diversity and equity , feel responsible for creat-

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