A U.S. Trust study found that people want their financial advisors to ask them about charitable giving. In fact, a third of clients surveyed think the topic of charitable giving should be raised in the very first meeting. Yet fewer than half feel their advisors are good at discussing personal or charitable goals with them.

Wondering how to start a conversation about charitable giving with your clients? Or looking to refresh your approach? Check out the article below from The American College blog looks at why it is important to include charitable questions when planning with Baby Boomer generation business owners. 


A 2018 Fidelity Charitable study found that more than 75% of entrepreneurs affirm that charitable giving is a critical part of who they are. Additionally, the median charitable giving for entrepreneurs is 50% more than non entrepreneurs.

The oldest among the baby boomer generation of business owners are now retiring, and many of them will soon find themselves poised to make transformative philanthropic gifts. As an advisor, you will want to position yourself with the business owner before their business sells, if you expect to manage the money after the sale.

This generation’s wealth is frequently locked up in farms, light manufacturing companies, real estate, land associated with business, crops, timber, car dealerships, construction firms, strip malls, and other illiquid assets. These businesses are about to transfer, creating enormous opportunities for exit planning and legacy planning.

Foundational questions to ask clients

Informed by strong family values and community ties, these business owners are often among the most generous givers when shown what is possible with proper planning. Technical strategies are important to adopt, however, asking better questions will be the method that sets you apart in your profession. Let’s look at three sets of question banks you can use to establish yourself as the business owner’s most trusted advisor.

Human questions

Factual questions establish a strong foundation of factual knowledge. This allows advisors to effectively prepare a financial plan and exit strategy for retiring business owners.

  • What is the business worth?
  • How can it best be groomed for sale?
  • Who will buy it on what terms?
  • Will the proceeds cover future retirement costs?

Values questions

Business-owning clients are in a position to make the largest gift of a lifetime, as they proceed to exit a business, become liquid, or plan charity into their estate. You can be a great service to these emerging philanthropists by teaching them questions to ask the right questions as they consider transitioning into a more strategic approach to philanthropy.

  • What would you like to preserve or change in the world?
  • What traditions or values have guided your giving to date?
  • Have any of your gifts given you joy?
  • Are any gifts giving you a sense of pride and personal achievement?
  • What is your vision of a better world?
  • What is needed to make change happen?
  • How will you experiment to see what works best?
  • What metrics or measures will indicate you are on track?

Charity questions

Before clients decide on a nonprofit, they need to understand how to direct the conversation and ask for what they want. Below are questions your client could use when meeting with the individuals or organizations who might receive a significant gift.

  • What will you do with my money and how will it make a difference?
  • At what level of giving can I endow a permanent program?
  • What will I get in writing (gift agreement) that lays out what I can expect?
  • What reporting will I or my heirs receive?
  • Do you accept gifts other than cash and public securities?

Multi-dimensional planning

The questions above influence the choice of charitable tools. Charitable tools can be used to save taxes, as well as create income for the donor. Below are three different charitable tools the client can use:

Donor Advised Fund (DAF)

If the client wants to give a business interest to charity and the charity is not able to accept it, the gift can be routed through a Donor Advised Fund. Often national funds, and local community foundations will accept a business interest, convert it to cash inside the DAF, and enable the to donor to grant money to whatever charities he or she wishes.

Charitable Remainder Trust (CRT)

With the right set of facts, the client may be able to put all, or part, of the business into a Charitable Remainder Trust, get a partial income tax deduction, an income stream for life, and avoid capital gain on sale of the asset inside the trust. C corporations are the ideal prospect for a CRT. A CRT gets income to the donor now, but provides the remainder to charity at a later date, often death, or the expiration of a term of years.

Charitable Lead Trust (CLT)

With a Grantor Charitable Lead Trust, a donor makes a gift into the trust, which then makes payments to charity for a specified time period. The donor receives an income tax deduction equal to the present value of the payments that will go out from the trust to charity. The downside is that each year, as assets inside the trust are sold to make the charitable payout, the donor will realize taxable income. However, with good investment planning inside the trust, the taxes paid over time may be significantly less than the tax saved up front.

Building your philanthropic network

The oldest of the boomers are in their 70s. This generation is known for talking about their grandchildren and often about their philanthropy, too. As you prove to be an asset to such well-intentioned wealth holders, you become a magnet for others like them and a sought-after resource. Your most generous clients will see you as a mission partner because you understand money, but also because you understand their higher purposes for family and community.

The most successful advisors in charitable planning do not just want to make a living, they also want to make a difference. That is what motivates and drives the Chartered Advisor in Philanthropy® (CAP®) curriculum at The American College of Financial Services. The philanthropy planning sector is an underserved and equally complex market that requires special training and expertise. For more information about receiving your CAP® designation and becoming a member of the philanthropic community, visit us here.

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