Starting the Philanthropy Conversation

As interest in philanthropy grows among high-net-worth individuals and families, professional advisers are becoming more committed to engaging their clients in discussions. However, many advisers lack the knowledge of philanthropic structures and the charitable sector and feel unsure of how to approach the conversation with their clients.

Starting the conversation about philanthropy does not need to be difficult. Here are my tips on how to get the ball rolling:

1. Ask the question

It may seem obvious, but the first question you should ask your client is ‘Do you support any causes or charitable organizations?’

If the answer is “no,” that’s ok. You’ve learned something useful about your client and can move on to supporting them in other ways. Remember, over 80% of Australians give to charity. Chances are, your client will indeed support a charity, and more questions will naturally follow.

2. Ask open-ended questions

If a client has previously donated or volunteered for a charity, ask them about their experience. It can provide insight into their underlying motivations and passions. To get the discussion started, here are some examples of powerful questions:

• What are you truly passionate about?
• What has motivated you to give to charity in the past?
• What was special about the cause or charity you chose?
• Is charitable giving a family value you want to share with the next generation?

3. Understand what your client cares about

In essence, giving is a deeply personal act. Several of my clients give to help others who are dealing with a difficulty that they have encountered in the past, such as providing scholarships for underprivileged students or supporting individuals undergoing treatment for breast cancer.

4. Make philanthropy part of your initial new client discussions

Advisers who successfully integrate charitable giving in their client conversations don’t necessarily say, “Let’s talk about philanthropy.” Rather, they incorporate the topic into their overall discussion. I recommend putting it on the agenda for the first meeting with a client, or it could be included in the initial data collection form for new clients.

5. Legacy

Conversations about legacy are particularly relevant to estate planning lawyers and financial advisers who are likely to be having conversations about long-term plans.

5. Tax benefits

Finally, incorporate philanthropy into regular tax discussions: In Australia, the tax benefits of giving to DGR charities are currently uncapped, making it a useful topic to add to tax planning discussions. If your client is already making significant one-off donations at tax time, why not suggest that they explore a more structured approach? It could be the tax-effective gift that keeps on giving.

If you are a professional adviser and would like to develop a better understanding of the fundamentals of philanthropy and structured giving, consider completing our Philanthropy Training session designed for advisers (FAAA CPD accredited). If you would like to know more, please feel free to email me or call 07 3211 9555.