Clients say that advisors are one of the most important sources of information about charitable giving; in fact, according to Schwab’s latest RIA Benchmarking Study, nearly 80% of advisory firms offer charitable planning. If basic charitable planning is no longer a differentiator, where is the opportunity for advisors? Clients also say they want even more guidance from advisors in order to realize their philanthropic goals. To meet this demand, advisors can build a more robust and specialized charitable capability. Helping clients identify and evaluate charities is a great way to add value.

With almost two million nonprofits in the U.S., many clients don’t know how to start narrowing the choices of causes to support. The following four steps, which were developed by the Effective Philanthropy Learning Initiative at the Stanford Center on Philanthropy and Civil Society in conjunction with Schwab Charitable, help clients identify their motivations and use them to guide their decisions about charities.

1. Pinpoint giving priorities

It is difficult for clients to choose a charity without first understanding their own priorities. Using priorities to define distinct focus areas for philanthropy will enable clients to give strategically to issues and causes meaningful to them.

For clients with a track record of charitable giving, consider reviewing their giving history and looking for themes in past behavior. Frequently, this simple exercise helps donors uncover trends that provide insight into why and when they made certain gifts, and better understand which issues they hold most dear.

If your clients are newer to philanthropy or wish to start fresh with a more strategic mindset, suggest they take time to reflect on what they hope to achieve. Some questions to ask include:

• Is there a particular cause or need that is especially relevant to you?
• Does a particular community of people or region have special meaning for you?
• Do you want to combine financial support with volunteering?
• Do you want to involve your family in your philanthropic efforts?

2. Identify charities making the greatest impact

Once clients have identified a cause, it is important for them to get familiar with the nonprofits making a difference in the area. Here are a few suggestions you can share or work on with clients.

• Tap personal and professional networks. Consider asking family or friends with significant experience in your focus area about which organizations they support or are familiar with. For example, a friend who is a human rights lawyer may have insights about organizations that help refugees.
• Consider professional resources. Philanthropic advisors and donor networks can offer valuable expert advice to help you identify effective organizations working in your focus area.
• Research a specific geographic region. Get to know the community foundations in the region, which tend to have a deep understanding of the local landscape.
• Seek recommendations from issue-area experts. For instance, an oncologist may be able to suggest cancer research organizations.
• Browse curated lists. Foundations typically share an online list of their grantees, which have been thoroughly vetted by the foundation’s specialized professional staff. You can also find inspiration by browsing lists of high-impact nonprofit organizations curated by established philanthropists, such as Give Lists coordinated by the Bill & Melinda Gates Foundation. Other curated lists and resources include those for humanitarian, emergency, and disaster relief efforts from organizations such as the Center for Disaster Philanthropy.
• Use online resources. GuideStar, Charity Navigator and Charity Watch can help you search for up-to-date information and data on nonprofits.

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