Strategic Generosity: Making the Most with Donor Advised Funds
After Michelle Clary and her husband, Andy, created their donor advised fund at InFaith Community Foundation, Michelle hosted a client appreciation event and asked them to help select charities to receive grants that year. It was an effective way to introduce them to the concept of donor advised funds.
“As my clients age, proactive charitable planning needs to be done just like retirement planning,” says the Thrivent Wealth Advisor. “Donor advised funds are tools they can use to incorporate strategic generosity into their plans.”
When discussing legacy planning, Michelle explains to clients that they can choose to leave assets to people, charities or the Internal Revenue Service. “More is left to the IRS when they aren’t intentional about a plan,” she says. “When the concept of donor advised funds is explained to charitably-minded clients who want to minimize taxes, it’s an easy conversation.”
Michelle explains how donor advised funds work in three steps:
- Clients make gifts to a donor advised fund established at InFaith. Michelle’s clients have given cash, appreciated stock, life insurance, IRA proceeds, and created charitable gift annuities.
- Donors claim a tax deduction the year assets are given.
- When the time is right, donors direct gifts to churches and charities of their choice. “Clients like the control and flexibility since they don’t have to decide charities right away, and they can change their minds over time,” she says.
Identifying Clients with Charitable Intent
Michelle points out that a majority of her clients are generous, as are most Thrivent Financial members. Natural clues to start a charitable conversation are revealed during the financial planning process when Michelle:
- Asks about beneficiary designations and reasons for choosing them.
- Notes whether clients spend free time volunteering and for which organizations.
- Listens as clients convey their priorities.
Michelle admits she is “extremely protective” when referring her clients to attorneys, accountants and other specialists, but she doesn’t hesitate to refer clients to InFaith. She says, “They are knowledgeable partners who always help with creative solutions and are committed to excellent communication with my clients.”
Get Started Today. To learn more about donor advised funds and to discuss options for specific clients, call InFaith gift planners at 800-365-4172.