Financial advisors are missing an opportunity to help clients with their philanthropic giving on a long-term basis, according to a new report issued by Fidelity Charitable on the giving habits of clients.
Only 30 percent of clients of Fidelity Charitable have talked to their advisors about giving more strategically over the long-term and only 33 percent have talked to advisors about what or how much to contribute to charity over time, the 2015 Fidelity Charitable Giving Report says.
Most clients have discussed with their advisors the methods they want to use to give (87 percent) and the tax benefits of contributions (84 percent), the report of 1,042 Fidelity Charitable donors says.
“Since philanthropy is a lifelong pursuit for many, there’s an opportunity for advisors to expand their conversations and engage more deeply with clients,” the report says. Fidelity Charitable manages donor-advised funds. It granted $2.6 billion in 2014, second only to the Bill and Melinda Gates Foundation, Fidelity Charitable says.
The number of charities supported doubled over the last decade to 97,000 in 2014, but the most popular charities, such as Doctors Without Borders, The Salvation Army and the American National Red Cross, have remained consistent, the report says.
“Dedicated charitable accounts help donors take a thoughtful and impactful approach to their philanthropy,” says Amy Danforth, president of Fidelity Charitable. “With a low minimum to entry relative to other charitable planning vehicles and a highly sophisticated program, we are enabling donors across the giving spectrum -- our median balance is about $16,000 -- to create more money for the charitable causes they care about and sustain their giving into retirement.”
Average activity within individual donor-advised funds has risen over the past decade, with donors recommending eight grants on average in 2014, up from five in 2005. The percentage of pre-scheduled grant recommendations has also risen as more donors take advantage of the ability to plan their giving by recommending grants months and even years ahead of time. In 2014, 23 percent of grants were from pre-scheduled recommendations, up from 8 percent in 2005.
“Most donors are financially and emotionally invested in philanthropy throughout their lifetime,” says Chris Carnal, head of fundraising for Fidelity Charitable. “There is an opportunity for advisors to more deeply engage with their clients by expanding their conversations to include clients’ motivations for giving, their long-term giving goals, and how they would like to involve family in their philanthropy.”