Page 44 - December 2018 | Cleveland Metropolitan Bar Journal

BarJournal CHARITABLE GIVING

JULY/AUGUST 2015
feATUre The Philanthropic Conversation

in the new era

BY DAVID M. LENZ

hat does philanthropic they usually or always initiate it, while 25% to best fulfill the donor’s intentions — whether
planning mean to you? said it is usually led by the donor. In contrast, that means using the right assets to leverage
To your client? Is it a 61% of donors say the donor initiates the the impact of the gift or setting up a charitable
synonym for a type of conversation most of the time, while only 6% structure that will best match the donor’s long-
W tax planning, or is it credit the advisor. term philanthropic goals for his or her family.
something deeper? If you are an advisor with any • 46% of advisors rated tax planning as “very Different donors prefer different types of gifts.
interest in tax, estate, and charitable planning, important” in how donors make their giving Some favor personal direct gifts to operating
you are aware that the Tax Cuts and Jobs Act of decisions, while only 16% of donors rated charities, while others would rather establish
December 2017 made significant changes to the taxes that high. family foundations to carry on a philanthropic
income tax laws surrounding charitable giving. • The primary reasons advisors believe that spirit in perpetuity. Tax attributes of these
The cap on cash contributions to public charities donors are reluctant to give involve the gifts may be similar or identical, but the way
has increased from 50% of adjusted gross income donor not having enough money for himself in which they connect with a donor’s personal
to 60%. The standard deduction has nearly or herself or not leaving enough to their philanthropic goals can be radically different.
doubled for singles (now $12,000) and married children. Donors, on the other hand, listed What type of giving motivates your
couples (now $24,000), while state and local tax their top concerns as lack of connection to an client? Answers may include one or more of
deductions are capped at $10,000, reducing the organization they want to support or concern the following:
number of taxpayers who will benefit • Simple Current Giving – Is
from itemized charitable deductions. the donor simply motivated to
There has been much If the charitable giving make gifts personally, either
speculation about what impact during lifetime or at death,
these changes will have on conversation between the to charities he or she favors,
charitable giving. Americans gave without consulting others?
$410 billion to charity in 2017, and advisor and donor starts and • Charitable Checkbook – Does
there may well be some marginal the donor want to outsource the
impact on charitable giving from ends with taxes, we, as advisors, administrative task of sending
these tax changes, but if the donations to each chosen charity
charitable giving conversation are missing the point. and possibly benefit from some
between the advisor and donor additional support to identify
starts and ends with taxes, we, as worthy organizations that are
advisors, are missing the point. effective in his or her favorite
As advisors, we often do not engage clients about whether the organization would charitable causes?
in charitable conversations as proactively as we appropriately manage the gift. • Passing Down Family Legacy – Does the
should, and we tend to focus the conversation Donors are motivated to give by a connection donor want to use a philanthropic structure
on wealth and taxes — missing the opportunity to a charitable cause, experience with the to preserve and transmit family legacy,
to connect with clients about the deep, charitable organization’s work, or because giving values, and history and perpetuate the family
personal ties they feel toward the causes back to make a difference for others is a part name for the next generations?
they support. A recent study by U.S. Trust 1 of their lifestyle for moral or religious reasons. • Raising Up Family Philanthropists – Does
entitled “The Philanthropic Conversation: Conversations about these personal topics offer a the donor want to involve the next generation
Understanding Advisor Approaches and Client window into a client’s priorities and motivations in his or her philanthropic activities as a part
Expectations” illustrated several ways in which that may illuminate other aspects of their estate of teaching his or her children the value of
there is an obvious disconnect between what planning, but by focusing on taxes and wealth giving back?
we, as advisors, think about the charitable advisors often miss this opportunity. • Community Impact – Is the donor’s
conversation and what donors perceive: Once the advisor understands the donor’s highest priority for his or her philanthropy
• When advisors were asked who initiates the giving motivations, the advisor is in a better making a difference in the world — often
charitable conversation, 38% of advisors said position to offer advice on how to structure gifts not just through direct gifts but through
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