Tax-advantaged charitable gifts, also known as planned gifts, offer a unique opportunity to maximize the tax code's benefits. This goes beyond the standard deduction for charitable donations. Our research has revealed a significant untapped potential to help the philanthropic affluent support the causes they care about with planned gifts.

Most wealth managers do not fully leverage these strategies for their clients or their own practices (see “Why Wealth Managers Miss Philanthropic Opportunities”). This missed opportunity is not restricted to wealth managers. Other private wealth industry and planned giving professionals also fail to help a solid percentage of the philanthropic affluent support non-profits with planned gifts.

According to the research, the biggest weakness is that wealth managers do not include charitable giving in the discussion. Of course, if clients say they have no interest in the topic, wealth managers must not push the matter. However, many wealth managers fail to understand their clients, resulting in significant missed opportunities comprehensively.

Outcomes, Not Mechanics
Critical to why private wealth and planned giving professionals are not as effective as they can be when discussing tax-advantaged charitable gifts with the philanthropically affluent is that they usually focus on the wrong topic. Extensive research shows that the majority focus on the mechanics of various tax-advantaged charitable gifts. The idea is that educating the philanthropic affluent about the different “products” will lead to more planned gifts. This proves not to be the case.

For example, many wealth managers spend time and effort discussing the operational difference between donor advised funds and private foundations. The comparison table is well-known and often handed out to prospects, clients and other professionals.

Most providers, such as trust companies and wealth tech firms, focus on the differences between donor advised funds and private foundations when talking with wealth managers, who do the same when speaking with prospects and clients. While there are times when discussing the differences is worthwhile, most often, doing so slows down the prospect’s or client’s decision-making. Discussing the differences is helpful only after the prospect’s or client’s desired charitable outcomes and finances are well understood, and the two options are viable.

Similarly, explaining how charitable remainder and lead trusts operate in initial conversations can prove counterproductive unless prospects or clients explicitly ask for the details. Wealth managers, lawyers and accountants become even more ineffective when they get into the weeds and talk about CRUTs and CRATs.

What is incredibly important in facilitating planned gifts is that private wealth and planned giving professionals focus on the philanthropic affluent's motivations, values and objectives. An excellent place to start is with the philanthropic personalities of the wealthy (see “Understanding the Philanthropic Affluent to Increase Planned Gifts”).

Seven Philanthropic Personalities
Based on extensive research, a psychographic framework of the philanthropic affluent was constructed to understand what motivates them to give and their attitudes toward gifting (see “The Seven Faces of Philanthropy”). The result of all this effort has been the identification of seven distinct philanthropic personalities, which is a helpful lens to view charitably inclined clients and prospects:

· Communitarians tend to focus their charitable efforts parochially.
· The Devout are primarily motivated to give for religious reasons.
· Investors incorporate monetary calculus into their charitable giving decisions.
· Socialites use their social peers to determine which non-profits to support.
· Repayers support non-profits because they perceive obligations to the organization.
· Altruists give because doing so creates a high level of self-satisfaction for them.
· Dynasts are socialized to the culture of philanthropy.

Using the seven philanthropic personalities can significantly accelerate the creation of tax-advantaged charitable gifts. It does so by providing a precise way for private wealth and planned giving professionals to connect specific planned gifts to the desired outcomes of the philanthropic affluent. It enables these professionals to construct a narrative that more resoundingly resonates.

Using the seven philanthropic personalities can be extremely useful in ensuring private wealth, and planned giving professionals can develop powerful narratives connecting charitable intent, prospects and clients with tax-advantaged charitable gifts. Customizing the narratives precisely can make professionals even more helpful.

Helping The Philanthropic Affluent Make Smart Decisions
Philanthropic personalities enable private wealth and planned giving professionals to connect charitable motivations with tax-advantaged charitable gifts significantly for the philanthropic affluent. However, making the narratives unique and incredibly meaningful to a client or prospect is still possible. This is possible by using the seven philanthropic personalities as a framework and using the Everyone Wins Process to more deeply connect their personal and financial lives and their charitable intent with tax-advantaged charitable gifts.

Private wealth and planned giving professionals use open-ended questions to discern a client's or prospect’s philanthropic personality. Going deeper with strategically crafted open-ended questions allows it to identify key facts, perspectives, concerns and goals that can keep the philanthropic affluent from making tax-advantaged charitable gifts.

The more significant and intimate insights derived using the Everyone Wins Process are insufficient by themselves. Private wealth and planned giving professionals also require a philosophy and approach that makes clients make smart decisions. This strongly contradicts the pervasive product orientation in the private wealth and fundraising industries. Instead of advocating for one or two planned giving options, the private wealth and planned giving professionals engage in collaborative thinking with the philanthropic affluent, which entails thinking through viable possibilities and interdependencies with prospects and clients so they can make smart decisions.

Implications For Private Wealth And Planned Giving Professionals
There is enormous untapped potential for private wealth and planned giving professionals to facilitate planned gifts. The complication is that most professionals are not very adept at aligning prospects' and clients' charitable agendas with various planned gifts.

Using the framework of philanthropic personalities, private wealth and planned giving professionals can better connect with the philanthropic affluent and develop narratives that produce results. Using processes such as Everyone Wins, they can add substantially greater precision that benefits prospects, clients, themselves and worthy causes. Ultimately, the aim is to help the philanthropic affluent make smart decisions, which means there will be more and larger planned gifts.

Jerry D. Prince is the director of Integrated Academy, part of Integrated Partners, a leading financial advisor firm. Russ Alan Prince is a strategist for family offices and the ultra-wealthy. He has co-authored 70 books in the field, including Making Smart Decisions: How Ultra-Wealthy Families Get Superior Wealth Planning Results.