8. Because so many estate planning attorneys and accountants now recommend donor-advised funds instead of private foundations at nearly all levels, many financial advisors have informed their clients’ other advisors that they can open and manage the assets in the clients’ donor-advised fund accounts. This prevents the other advisors from suggesting another donor-advised fund sponsor that the financial advisor is unable to work with.
9. Advisors who create donor-advised fund accounts for clients can make their own operations much more efficient, especially during the peak of the charitable giving season. They can do this by having clients donate stock to one fund sponsor instead of numerous charities. That reduces the workload of the advisory firm’s associates, and the clients themselves have to keep track of only one tax receipt. The accountants, meanwhile, will not have to hound their clients for an accurate accounting of all of their donations.
10. Advisors can also offer to submit the grant recommendations to the donor-advised fund sponsor to help out those clients who aren’t technology savvy and also help them overcome their reluctance to open and fund the accounts.
Donor-advised funds have allowed many advisors to get to know the spouses and children of their clients, since these family members are sometimes even more philanthropy-minded than the clients themselves, and will likely become the successors on the fund accounts. This even holds true for clients who aren’t married, since they have relatives or friends who will become the account successors after the clients pass on. In any case, the financial advisors are keeping their roles on the accounts for more years.
Not all fund sponsors allow advisors to manage the assets in their clients’ donor-advised fund accounts, so it is important to find the right sponsor. While advisors want to and should be able to manage the investments in the donor-advised fund accounts, they also understand that by discussing charitable planning with clients, the clients and their favorite charities will also benefit.
Ken Nopar is the vice president and senior philanthropic advisor for the American Endowment Foundation, the country’s sixth-largest and leading independent donor-advised fund. The foundation works with donors and their financial, legal and tax advisors in all 50 states.