Philanthropy may not be top of mind when reaching out to your clients, but the benefits of having meaningful discussions regarding philanthropy are tangible
Philanthropy may not be top of mind when reaching out to your clients, but the benefits of having meaningful discussions regarding philanthropy are tangible. There is a will, but clients are looking for the best ways to donate to charities while also meeting their financial and philanthropic goals. That means taking the conversation to a deeper level.
A recent Ipsos Canada survey of financial advisors (FAs) and high net worth (HNW) individuals on the incidence and nature of the philanthropic conversation reveals that HNW individuals are interested in having such conversations with an advisor. The research report was released in November 2014 by BMO Private Banking, the Canadian Association of Gift Planners (CAGP), The GIV3 Foundation and Philanthropic Foundations Canada (PFC).
“HNW individuals who have philanthropic conversations with their FA, find them useful and highly satisfying, however deep philanthropic conversations are seldom taking place,” says John Hallward, chairman of The GIV3 Foundation. “Interestingly, affluent individuals believe that having these conversations can help strengthen their relationship with their advisor.”
Ruth MacKenzie, executive director of the Canadian Association of Gift Planners, an association that works with both financial advisors and charitable fundraisers, believes there is a big opportunity for financial advisors to be more involved, for the benefit of clients and advisors, as well as the causes and charities doing essential work in our communities.
“The incidence of charitable giving has been steadily declining for the past 30 years and financial advisors could make a big difference in helping turn that around,” says MacKenzie. Everybody wins, but for advisors in particular, there’s a clear business case – talking about philanthropy will strengthen and deepen relationships with their clients.”
Advisors do believe it is important and appropriate to raise the topic of philanthropy with their clients and most report that they are already having these conversations with many of their clients, according to the research. However, most HNW individuals say that their philanthropic conversations are light and cursory in nature – not deep, meaningful discussions.
To affluent Canadians, philanthropy is about much more than just tax reduction
Like many financial decisions, charitable giving often comes from a place of emotion. The research indicates that affluent Canadians are interested in having more meaningful discussions with their financial advisors about giving. They are more interested in the emotional aspects such as their values regarding giving back and personal passions about how to make a difference. They are less focused on the technical or tax implications of giving.
According to Malcolm Burrows, head of Philanthropic Advisory Services at Scotia Private Client Group, there can be significant benefits to advisors that enter into the philanthropic conversation with their clients.
“When they first broach the subject, some advisors are amazed at how open and interested clients are to talk about their personal values,” says Burrows. “Some of their most meaningful conversations are about how and where clients can make an impact putting their charitable dollars to work.
Hilary Pearson, president of Philanthropic Foundations Canada, agrees that there is an opportunity for financial advisors to have an impact on the charitable sector.
“Canadians are likely to inherit very considerable legacies over the next twenty years as the baby boom generation moves into their 60s,” says Pearson.” If even a fraction of this inheritance is directed towards philanthropy, as it is likely to be, we will see a major increase in need for knowledge about philanthropy and effective giving.”
Based on the experience of Malcolm Berry, vice president of major gifts for the SickKids Foundation, a conversation about charitable giving can strengthen the bond between advisor and client in a way that you simply do not get from ordinary investment advice.
“It's pretty simple. If you can enable somebody to transform something, create an impact or fulfill a mission that is bigger than themselves – to help people or animals that they may never meet – it’s more powerful than simply making a gift or the tax benefits that come from it,” says Berry.
Financial advisors are starting to recognize that a comprehensive, holistic approach that includes insights into clients’ charitable values is good for business. When the client conversation shifts beyond the technical issues around investing and tax reduction, to connecting about a client’s charitable aspirations, there is a real opportunity to strengthen the relationship.
Berry points out that this helps your clients to make a difference where it most matters to them, and it also makes good financial sense.
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Signs your client may need help with charitable planning
A recent Ipsos Canada survey of financial advisors (FAs) and high net worth (HNW) individuals on the incidence and nature of the philanthropic conversation reveals that HNW individuals are interested in having such conversations with an advisor. The research report was released in November 2014 by BMO Private Banking, the Canadian Association of Gift Planners (CAGP), The GIV3 Foundation and Philanthropic Foundations Canada (PFC).
“HNW individuals who have philanthropic conversations with their FA, find them useful and highly satisfying, however deep philanthropic conversations are seldom taking place,” says John Hallward, chairman of The GIV3 Foundation. “Interestingly, affluent individuals believe that having these conversations can help strengthen their relationship with their advisor.”
Ruth MacKenzie, executive director of the Canadian Association of Gift Planners, an association that works with both financial advisors and charitable fundraisers, believes there is a big opportunity for financial advisors to be more involved, for the benefit of clients and advisors, as well as the causes and charities doing essential work in our communities.
“The incidence of charitable giving has been steadily declining for the past 30 years and financial advisors could make a big difference in helping turn that around,” says MacKenzie. Everybody wins, but for advisors in particular, there’s a clear business case – talking about philanthropy will strengthen and deepen relationships with their clients.”
Advisors do believe it is important and appropriate to raise the topic of philanthropy with their clients and most report that they are already having these conversations with many of their clients, according to the research. However, most HNW individuals say that their philanthropic conversations are light and cursory in nature – not deep, meaningful discussions.
To affluent Canadians, philanthropy is about much more than just tax reduction
Like many financial decisions, charitable giving often comes from a place of emotion. The research indicates that affluent Canadians are interested in having more meaningful discussions with their financial advisors about giving. They are more interested in the emotional aspects such as their values regarding giving back and personal passions about how to make a difference. They are less focused on the technical or tax implications of giving.
According to Malcolm Burrows, head of Philanthropic Advisory Services at Scotia Private Client Group, there can be significant benefits to advisors that enter into the philanthropic conversation with their clients.
“When they first broach the subject, some advisors are amazed at how open and interested clients are to talk about their personal values,” says Burrows. “Some of their most meaningful conversations are about how and where clients can make an impact putting their charitable dollars to work.
Hilary Pearson, president of Philanthropic Foundations Canada, agrees that there is an opportunity for financial advisors to have an impact on the charitable sector.
“Canadians are likely to inherit very considerable legacies over the next twenty years as the baby boom generation moves into their 60s,” says Pearson.” If even a fraction of this inheritance is directed towards philanthropy, as it is likely to be, we will see a major increase in need for knowledge about philanthropy and effective giving.”
Based on the experience of Malcolm Berry, vice president of major gifts for the SickKids Foundation, a conversation about charitable giving can strengthen the bond between advisor and client in a way that you simply do not get from ordinary investment advice.
“It's pretty simple. If you can enable somebody to transform something, create an impact or fulfill a mission that is bigger than themselves – to help people or animals that they may never meet – it’s more powerful than simply making a gift or the tax benefits that come from it,” says Berry.
Financial advisors are starting to recognize that a comprehensive, holistic approach that includes insights into clients’ charitable values is good for business. When the client conversation shifts beyond the technical issues around investing and tax reduction, to connecting about a client’s charitable aspirations, there is a real opportunity to strengthen the relationship.
Berry points out that this helps your clients to make a difference where it most matters to them, and it also makes good financial sense.
Look in the coming weeks for more 10 Weeks 10 Ways articles:
Signs your client may need help with charitable planning
