Some families decide to endow a foundation after trying a donor-advised fund. Griffin has seen others disband their foundations and distribute the assets among separate donor-advised funds for different branches of the family. While foundations can last in perpetuity, she notes, donor-advised firms are often terminated after two generations.
So where are donors granting assets? Participants in the Northern Trust Charitable Giving Program have made grants to such organizations as Doctors Without Borders, Berea College, the Friendship Circle Miami, the Connecticut Audubon Society and Catholic Charities.
The American Endowment Foundation saw an uptick in donor support for liberal causes in 2017, including the Nature Conservancy and Planned Parenthood, says Nopar. “We have donors that support the NRA and also the ACLU,” he says, “but probably not many that support both.” It was also the first year AEF donors granted a greater percentage of charitable dollars to educational organizations (25%) than religious organizations (20%).
Valas, of Fidelity Charitable, urges advisors to develop confidence and competence in charitable giving and to get the conversation rolling with clients, even if they feel uncomfortable or if their clients don’t bring it up. “We have data that shows clients are hungry for this conversation,” she says. Fidelity Charitable and other sponsors offer resources and training for advisors.
Advisors should also look beyond their clients’ brokerage assets and consider how they’re creating their wealth, says Valas. Whether it’s through a medical practice, a chain of fast-food restaurants or a mom-and-pop operation, she says, it could be their biggest source of philanthropy.
“If you don’t plant those seeds well in advance of the actual liquidity event or exit strategy, especially with aging baby boomers,” she says, “you’re going to have a real struggle to get your client on board with the beauty of not only the tax savings but the philanthropic impact down the road, in the heat of the moment.”