CHARITABLE PLANNING

Hannah Shaw Grove

A lot more than money is going to pass between generations in the next quarter century. How do you help?

HANKS TO THE $ 124 TRILLION THAT CERULLI ASSOCIATES predicts will transfer between generations over the next 25 years, opportunity abounds for financial advisors to enhance and grow their practices. How can advisors build multigenerational connections that will help them capture and retain assets? And how can they help their clients clarify and convey their values as they transfer their wealth to younger generations?

One way is by turning to philanthropy. It’ s a useful tool for helping your clients unite their families through shared interests, values and passions— which, according to Foundation Source research, matters a great deal. In a recent poll of high-net-worth investors about their priorities, 87 % cited passing on their core values to younger generations, and 74 % cited dynastic stability or preserving the family unit and wealth for multiple generations.

Philanthropy is also a topic that lets you, as the advisor, interact with your clients on a deeper and more personal level as you help them articulate their values, connect those values to charitable aspirations, and formalize their giving through tax-advantaged vehicles such as donor-advised funds, charitable trusts and private foundations. Family members of all ages— including young children— can contribute their thoughts, opinions and ideas for giving. Clients with a private foundation can easily engage their younger members in its operations and charitable activities, and those with donor-advised funds can grant advisory rights to their children who are 18 years and older.

The Lilly Family School of Philanthropy says that charitable giving is prioritized more highly by women than men, which is noteworthy, given that

In a recent poll of high-net-worth investors about their priorities, 87 % cited passing on their core values to younger generations. women, according to McKinsey & Company, are projected to control nearly twothirds of U. S. wealth by 2030 as a result of the“ Great Wealth Transfer.” With longer life expectancies, women will inherit proportionately more of their families’ assets before passing them on to the next generation. Advisors who can provide charitable expertise will likely work more effectively with women as well.

To hone your charitable expertise, it’ s helpful to understand not only the intricacies of formal giving vehicles( such as their structures and their tax and estate planning benefits) but also— and perhaps more importantly— how the notion of“ giving to others” is viewed by varying generations so you can tailor your approach accordingly.

Generational Perceptions Of Giving While many older high-net-worth clients care deeply about building a legacy of wealth that spans generations, Gen Zers and millennials think about wealth and giving differently than their parents and grandparents. As they’ ve come of age, they’ ve faced challenging social, geopolitical and economic issues that motivate them to call for grassroots social change. And now, as they enter their peak earning years, they’ re embracing charitable giving to make that change happen.

To support advisors in understanding these age-based differences, Foundation Source recently surveyed more than

MAY 2025 | FINANCIAL ADVISOR MAGAZINE | 21