Clients Expected to Increase Donations to Offset Tax Hikes

When asked which giving vehicle they expect to see increase in use over the next five years, 39% of advisers said donor-advised funds, compared to 20% who recommended private foundations. Additionally, 82% of advisers believe that a donor-advised fun is a valuable option for their clients.  

Donor-advised funds offer certain benefits over a private foundation, including donor anonymity, fewer administrative burdens, lower costs, and greater tax advantages, and advisers can play an important role in helping their clients choose the vehicle that best suits their needs, a press release said.  

Advisers with experience with donor-advised funds recommended them for clients who seek an immediate tax deduction but want more time to decide where to disburse grants (65%), who have reached a certain asset level (60%), and those who want to keep and access all of their charitable records in one place (42%). 

Fifty-two percent of advisers reported proactively offering charitable planning advice, though 63% believe clients would be interested in it. The survey found that many advisers are reluctant to offer such advice because they see philanthropy as a client’s personal decision (44%), because clients have not requested help in the area (52%), and because they do not feel qualified or knowledgeable enough on the topic (31%). 

Eighty percent of advisers believe the number one benefit of offering advice on charitable planning to their clients is that it’s a relationship builder. Other top benefits are that it positions the adviser as a broad financial expert (72%), keeps assets under the adviser’s management (61%), and leads to a multi-generational relationship (56%). 

The 2010 Fidelity Charitable Gift Fund “Advice & Giving” survey gathered responses from more than 500 financial advisers about their approach to providing charitable planning advice. For more information, go to www.fidelity.com.