Schwab Charitable

As 2018 comes to a close, it is a great time to discuss clients’ charitable giving strategies for next year and beyond.

2017 shattered giving records. Strong markets and the prospect of tax reform drove total charitable giving past $400 billion in America for the first time ever. Meanwhile, Schwab Charitable donors, many who work with advisors, recommended $1.9 billion in grants to philanthropic groups last fiscal year – the most in our history.

2017 shattered giving records. Strong markets and the prospect of tax reform drove total charitable giving past $400 billion for the first time ever. Grants in fiscal year 2018 reached $1.9 billion at Schwab Charitable, one of the largest national providers of donor-advised funds and other philanthropic services, where nearly 76% of account assets are associated with a financial advisor.

The Tax Cuts and Jobs Act has generated a host of questions about tax and charitable planning in 2018 and beyond. Educating clients and guiding them to the most impactful and tax-smart charitable giving can help deepen your relationships and differentiate your practice.

I was honored to attend the 2017 Philanthropy Innovation Summit at the Stanford Center on Philanthropy and Civil Society. The intensive day-long program gathers thought leaders in Palo Alto to discuss research, best practices, and new strategies that can increase philanthropic impact. I heard inspiring stories about charities around the globe.

Philanthropy can be a powerful way for families to deepen relationships across generations, develop a shared mission, and increase their impact on the world. It is also a powerful way for advisors to deepen relationships with clients, prospects and their families by being an important resource to help them maximize their charitable contribution deductions and reach their charitable goals.

Why strong markets, possible tax reform, and disaster relief and recovery may trigger the biggest giving year in U.S. history

Discussing charitable giving with clients can deepen your client relationships and help you grow your practice. A 2016 survey by U.S. Trust found that nearly all high-net-worth donors (94%) are curious to know more about charitable giving.

Discussing how to donate non-cash assets with clients provides an opportunity for advisors to help increase the impact of a client’s charitable giving and maximize their tax benefits at the same time.

Non-cash assets provide a powerful way for clients to increase the impact of their charitable giving and maximize tax benefits at the same time. However, many investors are still confused about the advantages of donating non-cash assets such as publicly traded stock or real estate, instead of giving cash, a check or by credit card. Offering expertise on this topic presents an opportunity to educate clients, deepen your relationships with them and help them increase their giving by as much as 20%.

Private equity funds often incur significant value over time, and may face taxable distribution. For philanthropically minded clients, illiquid assets such as these that have appreciated in value can be among the most tax-advantaged items to contribute to charity.

Clients can donate appreciated, non-cash assets to charity as a more efficient, tax smart way to make charitable contributions. Your senior executive and/or entrepreneur clients may find that their most appreciated assets come in the form of illiquid assets, such as privately held C- and S-Corp stock...

Contributing non-cash assets to charity can be a smarter way for clients to support the causes they care about. In addition to publicly traded stock, IPO shares and restricted stock, clients can donate real estate assets to charity to maximize their philanthropic impact and minimize taxes.

For charitably-inclined clients who are business executives or investors, investment assets that have appreciated in value can be among the most tax-advantaged items to give to charity.

For advisors with philanthropically-minded clients, publicly traded appreciated stock can be among the most tax-advantaged items to donate to charity. Contributing such assets may enable the donor to enjoy a current year tax deduction and potentially eliminate capital gains tax liability on the sale of the asset, while allowing the charities they support to receive the most money possible.