Individuals become wealth advisors for a host of reasons. For many, it’s the thrill of fortunes and building a life in a career that allows you oftentimes to be your captain.
For others, it’s a profession that will enable the combination of education and sales within an industry with higher-than-average attrition rates, thus quenching their competitive spirit.
Regardless of why someone starts down this path, the one paramount thing is the fiduciary responsibility of financial advisors to ensure the wishes of their clients are followed to the letter.
Each financial advisor makes a compact with their clients that they will carry out their wishes and invest in funds that meet the agreed-upon risk, sectors, and growth potential.
However, the philanthropic side of the client’s life sometimes gets overlooked in these discussions. Candidly, ensuring a client’s philanthropic goals are met can create tension for some advisors, particularly when the client’s world view clashes with the advisors – or, as we see more and more, with the progressive worldview
Donor-advised funds offer a tool that can be uniquely helpful to advisors in discussions around charitable giving. Donor-advised funds, or DAFs as they’re often called, offer a flexible, tax-friendly way for donors to handle their giving.
Moreover, the wide variety of DAF providers out there allows you as the advisor to match the right one with your client—even as you continue to manage the funds invested in the charitable account.
Here are just a few of the ways DAFs enable wealth advisors to increase their client’s philanthropic impact.
- Client privacy. Given the recent rulings handed down from the Supreme Court and the general attitude towards certain groups, DAFs provide autonomy for individuals to exercise their Constitutionally protected rights to support causes that align with their ideals. I cannot stress this benefit given the giving landscape of intimidation and shaming by some groups.
- Donor-advised-fund providers can help your clients “bunch.” If you haven’t heard of this strategy, we’re here to help. Perhaps you have a client that doesn’t typically itemize but nonetheless faithfully and regularly gives to charities. They could potentially utilize the so-called “bunching” strategy to save money in taxes and simplify their giving. Read more about the bunching strategy here.
Not all donor-advised-fund providers are created equal. Some commercial donor-advised-fund providers stonewall or block altogether grants to certain charities, especially charities that align with conservative values, as my colleague and DonorsTrust Vice President Peter Lipsett discusses in a recent article for the DonorsTrust blog.
- Your clients are free to align their giving as there are different types of DAFs. You don’t have to settle for a donor-advised-fund provider that doesn’t share your values. You have options! Why not partner with a donor-advised-provider that knows the ins and outs on all the great projects and initiatives to preserve civil liberties and promote human dignity? DonorsTrust President & CEO Lawson Bader in his latest Kiplinger column writes about the different types of DAF providers. Read the column here to figure out which donor-advised-fund provider would work best for you.
- DAFs let donors put their charitable dollars in ETFs to grow their giving. Is your client undecided on where to direct his or her charitable dollars or simply want to grow their dollars over time and save up for a handful of larger gifts? No problem. DAFs offer various investment options. Rather than keep charitable dollars in a money-market fund—and while that could be a fine strategy depending on your giving time-lime—some givers would rather grow their dollars over time. DAFs let donors do just that.
Donor-advised funds (DAFs), and particularly those under the stewardship of DonorsTrust, provide distinct advantages for financial advisors looking to support their clients’ charitable intent while offering immediate tax advantages. Here are some things that set DonorsTrust apart from other donor-advised-fund providers:
1) We’ve lowered our fees to compete with the approximately 1,000 DAF providers out there. Here is the blog on that.
2) We understand the landscape of charities that work to preserve civil liberties. Want to discover and support charities that are advocating for your values? Do it through opening a donor-advised fund with DonorsTrust and listen to our Giving Ventures podcast to discover opportunities to change the world for the better.
3) We offer values-based ETFs. No more funding the BlackRocks of the world and gimmicky “Environmental, Social, Governance” (ESG) funds that, as Andy Kessler of the Wall Street Journal writes, are expensive and badly marketed. What’s more, they often fail to protect clients’ values and philanthropic goals. Here is the blog on our pro-life, pro-Second Amendment, and pro-made in America EFT offerings and another blog that expounds on the value of these investment options.
All of the reasons listed create opportunities for financial advisors to fulfill their fiduciary responsibility which in turn leads to more opportunities to strengthen the ties with clients by putting their needs first. Investing and philanthropic endeavors are both wildly personal. Both create impact and legacy for clients. Each need to be handled in a way that builds trust and helps insolate outside influences. For many clients, DonorsTrust is the best way to accomplish both.
If you would like to learn more about DonorsTrust and how our philanthropic services could help your clients, register for our informational luncheon. Join us at FreedomFest Friday July 15 from noon to 1 p.m. in Grand Ballroom G at the Mirage for “Protecting Your Clients’ Philanthropy from Wokeism.”
During this private lunch program, experts and special guests we will cover the problem with the big banks and how they covertly undermine the values of their center-right clients. How can you protect the charitable giving of your clients? Prior registration required. Click here to register.
Lukas Dwelly is a philanthropic advisor at DonorsTrust. Prior to joining DonorsTrust in 2022, Lukas spent more than fifteen years as a consultant and nonprofit executive, raising tens of millions of dollars for state and national charities. A decorated veteran, Lukas is an intelligence officer in the Navy Reserves. He is the proud father of twin teenage girls and his goldendoodle, Norman Buckley, and is a single-digit handicap golfer.