Silicon Valley Community Foundation models partnerships with Financial Advisors
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Silicon Valley Community Foundation models partnerships with Financial Advisors
T HAPPENS IN SILICON VALLEY ALL THE TIME , and likely in your area , too : the lightning-strike ‘ wealth event ’ that abruptly elevates a working professional to an imminent philanthropist . What next ? Liza Hanks loves that question from advisors in the startup-studded swath of California served by the Silicon Valley Community Foundation . She is the community foundation ’ s director of gift planning , and one of the best parts of her job is collaborating with financial advisors who want to bring sophisticated philanthropic planning to their clients .
From reaping unexpected riches sparked by an IPO to coming into a long-expected inheritance , clients often arrive at the threshold of philanthropy with only a general idea of the problems they hope to address .
It ’ s a pivotal discussion for advisors as much as for clients . Defining philanthropy and then mapping a plan is an opportunity for advisors to deepen their relationships as they explore with clients their values and priorities . Multigenerational planning naturally segues into meaningful conversations with next-generation family members , setting the stage for enduring relationships .
Community foundations can help you achieve all that , and more .
Clients often need a game plan to put their values to work in the communities where they live , work and observe problems that they hope to address . With deep knowledge of local issues , barriers and proven solutions , community foundations are perfectly poised to convert your clients ’ aspirations to custom philanthropic road maps . “ We can help a client think through their vision . How do they operationalize that ?” says Hanks . “ Say they want to work on homelessness . There are a lot of ways to accomplish that , from an endowment to giving the money away immediately , in a short-term , high-impact way . But which nonprofits are doing fantastic work around this issue ? SVCF does the due diligence to confirm the donor can achieve their goals . We can make recommendations to streamline clients ’ charitable strategies .”
Identifying the right organizations to support , while difficult , isn ’ t the only part of charitable planning : understanding what assets are best to give is also a key consideration . Highly appreciated assets that clients have held longer than one year make extremely effective charitable gifts , yet many donors may not even realize that they can be used for that purpose . It ’ s in the practical details where SVCF partners with professional advisors to both meet client needs and create high-impact philanthropy .
For instance , advisors working with high-networth individuals often manage portfolios with many asset classes , some of them illiquid . Such assets don ’ t have to be a roadblock to effective giving . SVCF often accepts illiquid assets such as restricted stock , real estate , private equity , cryptocurrency and partnership interests .
By donating these complex assets , clients can often claim favorable tax treatment while preserving their liquid assets for other uses . SVCF holds illiquid assets until a liquidity event occurs . At that point , the net sale proceeds can be transferred to a donor advised fund , converting illiquid assets to charitable currency . A donor , for example , holding limited partnership interests in a venture fund could donate a portion of those interests to SVCF , receive a charitable deduction for the gift , and fund their future philanthropy when the fund liquidates and returns profits to investors .
For other donors , creating a customized investment portfolio that reflects their values is an important part of their charitable strategy . For these donors , SVCF offers an individually managed fund program that allows a donor to recommend their own trusted advisor to manage their charitable portfolio and create a customized investment strategy . One donor , for example , a long-time environmentalist , wanted a portfolio that reflected her environmental and social priorities . Working through the individually managed fund program ensured that her donoradvised funds were invested in environmentally sound assets . And , the individually managed fund program enabled her trusted investment advisor to continue to manage the assets while supporting her philanthropic goals .
Familiar but underestimated Silicon Valley Community Foundation is the country ’ s largest , setting the standard for similarly structured community foundations that are poised to help advisors in their locales . Many people are aware of the country ’ s 900 community foundations , but fewer realize the scope of services they offer high-net-worth clients and financial advisors . According to the latest study of American philanthropy by the Lilly Family School of Philanthropy at Indiana University , about half of Americans were familiar with community foundations but were not sure exactly what they do ; another 32 % reported that they had a strong working understanding of community foundations ’ purpose and operations .
But even with a general awareness of community foundations , Americans trust the institutions , the Lilly School study found . Its survey revealed that only religious charities are trusted more than community foundations .
Community foundations are closely affiliated with donor advised funds ( DAFs ), for good reason : they invented them nearly 100 years ago . DAFs comprise about a third of the assets managed by community foundations and are growing slightly faster than the overall AUM by the foundations , according to the Community Foundation Research and Training Institute .
With their generous mandate and high credibility , community foundations are ideally situated to enhance financial advisors ’ own reputations with their clients . Chances are good that clients are primed to agree that a community foundation should be at the top of your list when considering specialized advice for structured giving .
Expertise standing by
Investing experts at SVCF and your local community foundation are at the ready to create custom plans that can put even the most unusual assets to work for clients ’ legacies . “ You open the account , and we do all the work that private foundation staff might do ,” explains Hanks .
SVCF understands that financial advisors are critical partners in helping clients achieve their charitable goals . Clients are looking for engaged , values-driven advisors to help them create meaningful change . SVCF is here to help advisors offer sophisticated charitable planning . Working together , your clients can be sure that no matter how seismic their ‘ wealth event ,’ they can contribute to the health and well-being of their communities .
To learn more about SVCF , please contact Liza Hanks , JD , Director of Gift Planning , at lhanks @ siliconvalleycf . org .
This content is provided for informational purposes only . It is not intended as legal , accounting or financial planning advice .