DAF Insights for Advisors: How to Connect with Clients about Giving at Year-End

You may have heard this time of year referred to as “Giving Season.” That’s not just because of the holiday spirit of generosity; it’s also because people are racing against year-end tax deadlines and making more charitable gifts than at any other time of the year.

When you meet with your clients at this time of year, charitable giving may already be on their mind—even if they don’t think about it as part of their routine financial planning. You can help them stay ahead of the curve by broaching the topic yourself. NPT’s Essentials of Year-End Giving white paper can help you cover the basics of using a DAF at year-end. You and your clients can use this resource to check in on giving strategies that can help them achieve their charitable goals while also being smart about tax savings.

Whether your clients already have a donor-advised fund (DAF) or are considering establishing one, here is an approach you can use to incorporate giving into your client meetings:

Start with the Big Picture

Get right to it: Ask your clients about their philanthropic goals. If they don’t know how to respond at first, ask if they have any regular causes they support, or whether they currently serve in a volunteer or board role with any particular nonprofit, school or house of worship. Engage them in talking about their passions, so you can discuss the measurable steps they can take to incorporate those passions into their financial planning. This is when you can also ask about their giving budget. Has the market affected their ability or willingness to give? Have they experienced a wealth event, like the sale of a business, this year that makes a charitable gift a sound decision to offset taxable income? How much should they be setting aside for giving to achieve their charitable goals? Talk to them about how a DAF might help them manage their giving for the future.

Delve into Details

Whether your client already has an NPT DAF or is deciding to open one for the first time, the next thing to do is to discuss the details of how the DAF is—or will be—set up. Review the DAF investment allocations to ensure they fit your client’s risk profile and giving goals—or suggest an impact investment portfolio to align with your client’s principles. Invite your client to consider any upcoming grants they plan on recommending, and whether creating a recurring grant schedule might offer steadier support to their favorite charities while also saving them the time of entering multiple grant recommendations. Finally, help them determine the soundest ways to contribute to their DAF. Credit card contributions via NPT GivingPoint may be convenient if you’re strapped for time, but a contribution of a non-cash asset like appreciated securities or hedge fund interests may offer even greater tax advantages.

Get Ready for Next Steps

Of course, considering the timing of these conversations, you may have to act quickly if your client decides to make a move before the end of the year. In this case, gather all the information you’ll need to go forward. I recommend starting with the 2021 Contribution Deadlines to make sure you give yourself and your client enough time to submit contributions of all types so that they may be processed by the December 31 tax deadline. Scan the Contribution Agreement form to make sure you have all the relevant information about the asset or assets your client will be gifting. If your client is just getting started, make sure you’ve talked through all the decisions about joint and secondary advisors, Legacy Plan beneficiaries and successor advisors, and investment allocations. And always be sure that when you submit any DAF paperwork, you include all relevant signatures to prevent processing delays.

Please know that as you and your clients navigate giving at this busy time of year, NPT is here to help. We have increased our staff size and extended our hours to answer all of your donor-advised fund questions. We also provide resources to support your client conversations, like our Giving Season Central page, which offers a quick way to access contribution and grant deadlines.

For more information on how you can use a DAF to support your clients’ charitable giving, please call NPT at (888) 878-7900 or email us at npt@nptrust.org.

NPT does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.