How advisors support philanthropy.

Three reasons to use a donor-advised fund (Justyn Volesko)

As tax advisors, we want to talk to our clients about best ways to give to charity most tax efficiently.

We like to educate clients on what options are available to them. And most of the time, there are lots of tax efficient and other niceties to being able to set up a donor advice fund.

There are a variety of reasons for using Schwab Charitable. We have some clients who maybe this is the last year that they're getting significant income, and, could frontload donations in that year for tax purposes.

Another instance, if a client has significantly appreciated securities, I, tell those clients, "Let's fund a donor advised fund with appreciated securities instead of cash out of their bank accounts. If you want to make a $500 contribution to your local organization instead of having to send, a few shares of a particular stock, you fund a donor advised fund and now you can very easily make some of these smaller donations to these charities.

Sometimes clients will come to us and, and ask us if they should set up a foundation . Most of the time, a donor advised fund can accomplish much of what a client is looking to accomplish with a foundation, but at a much lower cost, much lower complication.

A donor advised fund for one of those three reasons almost always makes sense.

The ease of, of working with Schwab Charitable is probably the number one thing that I've enjoyed most. Without Schwab Charitable we wouldn't be able to provide the value that we provide to our clients with regards to charitable giving. Schwab Charitable has been great in terms of providing the knowledge and expertise to support the advice and guidance that we give to our clients.

How to stretch charitable dollars (Chris Wheaton)

So, often times we find, when we start working with a client, they're only giving to charities via cash gifts. So, one of our first conversations is to talk about using long term capital gain property.

The tax benefits are really unrivaled, to the extent someone has any lower tax basis securities in their portfolio, which almost everybody does. It's really a no-brainer to utilize those securities versus cash. They get the write-off for those at fair market value, so it may only be costing them 50 cents on the dollar to give to a charity. And then on top of that, if they get an extra 20 percent tax benefit of avoiding the capital gain, the actual cost of giving is driven down considerably. And that either allows them to give the same amount they've always been giving, or if they're getting that big tax write off, they might actually bump up the amount of giving they're doing each year.

The vast majority of our clients have charitable intent and it's almost a shame to not set-up one of these Schwab Charitable funds to help them because it is so tax efficient and it's probably the easiest way for them to give to multiple charities.

I have a Schwab Charitable account, personally. And the features I love are probably what the clients love. Once I've got the charities that I give to regularly in the system, it only takes me a few minutes to quickly make gifts to charities. And the flexibility to be able to give more in some years and less in others is a great benefit.

A charitable wallet (Craig Fasano)

The donor-advised fund as a tool has definitely increased what we see in our clients donating to charity. It’s just made life so much easier on the charitable side. It also fosters more upfront charitable gifting, because people understand that they're setting up something that's going to benefit them for the long-term and their family.

I say to clients we could set up a vehicle that's inexpensive and easy, fund it with low basis securities, potentially avoid the capital gain on the disposition of the securities, and get you a tax deduction at fair market value.

Now you have an account that serves as your charitable wallet, and if you want to give gifts as little as $50, you can do that. In pre-donor-advised-fund days, it would be a big pain in the neck to give 5 shares to this hospital or whatever it is. With the donor-advised fund, it streamlines everything.

And there's no time frame on when that money has to come out to the end charity. So for people who are retiring, they can fund it while they're working , when they feel flushed and they feel like there’s more deduction value to do it. And then having the ability to send the checks out later on is something that they all really appreciate.

I have an older client who set up a donor-advised fund, and they were astonished at how easy it was to do online. And it really gives clients this vehicle or wallet that is something that can be useful not just today, but going forward.

Private stock contributions (Justyn Volesko)

We have clients who have some private investments that you can't typically just give to a charity.

And Schwab Charitable has been very helpful in terms of figuring out the best way to accept private stock into a donor advised fund. It's been an advantage and a value-add that we've been able to provide to some of our clients.

And it enables us to offer a strategy to a client, who may not have even thought that it could be an option. A client who potentially has 90% of their balance sheet in their private company stock and may not be able to monetize that otherwise.

Being able to use Schwab Charitable to make charitable contributions using some of these assets certainly opens up the ability for these clients to make donations that maybe they couldn't previously make. And it certainly increases how much clients are interested in giving. So there's much more to charitable planning and giving than a lot of folks don't necessarily realize is out there.

Schwab Charitable allows us to offer more alternatives and options to our clients and therefore provide greater value to them.

It certainly helps the relationship with the client, because number one you're adding value in an area that they didn't necessarily know that there was value to be added. And it becomes more of a personal discussion with the client. And, in my experience, it's deepened the relationships and gotten me closer with the client on a personal level.

Family giving for years to come (Dan West)

Many of our clients have charitable intentions. They want to give money. But they're not exactly sure. Our job is to explore the next conversation of what they really want to do and how we can construct that.

It might be a good tax year to make a significant gift, so when that happens, we say, "Let's set up a, donor-advised fund with Schwab Charitable.” We can figure out how we give later. And also we can bring your children on board to then help facilitate an ongoing family gifting goal.

We actually encourage all of our clients who have Schwab Charitable donor-advised funds to list their children as successor advisors. So therefore, your children or whomever you designate can actually step in your shoes and then carry out your same desires. What's unique and exciting about donor-advised funds including Schwab Charitable is that you don't need to create a trust document to do that.

You can set up a fund and then then you now have the opportunity to dole that gift out over the next 5, 10, 15, 20, 25 years. It's very simple. It's very easy. We've used it many years. And clients all love their fund.