As a former fund-raiser for nonprofits, Kathleen Rehl is bothered by the fact that financial advisors and clients will often work together for years without the subject of charitable giving ever coming up.
That's why, when she opened up shop as a certified financial planner in 1996, she decided things would be different in her office.
Rehl, in fact, broaches the subject of philanthropy with all her clients. Every one. But she's not pushy about it. Instead, Rehl opens up a door to her clients and lets them decide if they want to walk through.
What Rehl does is offer all clients a 10% discount on their first year's annual retainer fee, if they opt to devote the discounted amount to a charity of their choice. In her eight years as a planner, during which time she has built up a practice that services 50 clients, Rehl has never had anyone refuse the offer.
Indeed, she says, many clients take the offer and run with it-continuing to support charitable causes for years after making that first donation. In one case, she made the 10% charity offer to a new client who was working on a doctorate degree at a local university, and who had never thought about engaging in philanthropy before. The client said she'd think about it and left the office. Two weeks went by without a word from the client, leading Rehl to believe she'd forgotten about the whole thing. But then the client called, saying she wanted to devote the 10% to a local women's shelter. It turns out she spent the entire two weeks researching charities, Rehl says. In another case, a couple took time to think about it and decided on giving the money to a children's theater in their town.
"In both cases, they have continued to give," Rehl says. Rehl finds that most clients do have causes that they feel strongly and passionate about, but for whatever reason never pondered the idea of acting on those feelings with an organized plan for charitable giving.
In most of these cases, all it took was a discussion about philanthropy, and the many vehicles that can be used to give to charities, to spark a client into action, says Rehl. The problem, as she sees it, is that not enough financial advisors are providing that spark. "It's not discussed by some professionals, maybe because they're uncomfortable talking about something they don't do themselves," she says.
Yet there are advisors who are recognizing that charitable giving plays an important part in many clients' lives, and that financial advisors are among those from whom they're looking for assistance. Advisors also add that philanthropic assistance is not just being sought by the superwealthy, but by those lower on the asset chain as well.
Advisors, for instance, don't necessarily have to get into the business of administering private foundations to play a role in their clients' philanthropic planning, says Michelle Goldstein, owner of Goldstein Financial Future in Dallas. Her advice to clients ranges from reminding them to deduct mileage for weekly volunteering efforts to the mixing and matching of charitable remainder and lead trusts.
One of the most important roles an advisor can play, she says, is to ensure that clients' goals are suitably matched with the proper charitable vehicle. "I think the biggest mistake people make is not getting the biggest bang for their buck," Goldstein says.