They may be educating their parents about how donating appreciated securities to a fund is much more tax efficient than writing checks to charities. It’s also easier to keep track of their donations because they just receive one tax receipt from the donor-advised fund sponsor and they can view past grants online, he says.
Millennials working for start-ups often fund their donor-advised funds with company stock “that’s gone through the roof,” he says. They can also donate appreciated stock with a very low cost basis that they received from a grandparent, he says.
The American Endowment Foundation has helped families donate real estate, life insurance and other assets they no longer want or need. Parents often plan to donate IRAs when they die to reduce the tax bite, says Nopar. A CPA should weigh in on all tax strategies being considered, he adds.
Greater Opportunities
Jenna Mulhall-Brereton, chief philanthropic services officer at National Philanthropic Trust, another leading donor-advised fund sponsor, has noticed millennials are starting to give actively while still building their businesses and raising their families.
For this generation, “everything is a lot less siloed in life than it was certainly for baby boomers and even for Generation X givers,” she says. “Millennials sort of blur the lines” along a continuum that includes socially responsible investing, impact investing and using purchasing power to effect change.
According to the “2018 U.S. Trust Insights on Wealth and Worth” survey, 77% of wealthy millennials own impact investments or are interested in impacting investing, Mulhall-Brereton notes. With a $25,000 minimum, National Philanthropic Trust’s fund skews more toward baby boomers, she says. Other entities, she notes, are developing online tools with low barriers to entry. For a $20 minimum, “Millie,” an app built by and for millennials, gives users access to a donor-advised fund through the nonprofit Infinity Benefit Foundation.
Millennials also think differently because they’re “digital natives,” says Mulhall-Brereton. Their access to information gives them greater awareness of charitable needs, they’re using social media to mobilize their peers around issues, and they’re discovering, she says, “there are greater opportunities for social impact at all levels of wealth.”