CPA Wealth Provider, January 2005
There’s a major shift in the philanthropic wind going on.
For decades, a big misconception shared by many fundraisers was that financial professionals are the enemy, that they are out to shield every possible cent of their clients’ portfolio from both taxes and fundraisers. You know that nothing can be farther from the truth. With current tax laws, philanthropic vehicles are virtually the only way that wealthy families can maintain at least control and direction of their money into the next generation. You want to help your clients to make good choices about the charities that will be the objects of that philanthropy. It reflects well on you as the advisor and helps you to retain your clients’ trust and business.
Still, too many fundraisers look upon accountants and financial planners as adversaries in their efforts to garner large donations from major gift prospects. What’s happening to change their attitudes?
Two phenomena are at work here. First, fundraising is changing from a low-paying, low-prestige job to one that is rewarding, if not lucrative. While fundraisers’ incomes will never equal those of private industry, much has been made in the IRS and the press about the high salaries being earned by top executives at many nonprofits.
When fundraisers were low-wage earners, they were personally unfamiliar with the work of wealth advisors and therefore feared you. With the upgrading of the profession, many fundraisers are for the first time in positions where they need professional advice from accountant and financial planners for their personal investments. When they use your services, they understand you and don’t fear you. They learn that you are out to help them (and your clients) accomplish their financial goals, even when that includes large charitable donations.
Both your clients and fundraisers look to you as an advisor and a gatekeeper.
According to a report prepared for Banker’s Trust Company by the Philanthropic Initiative in 1996, the main reasons that wealthy persons are not more philanthropic were a lack of time, and a lack of information about the missions and fiscal responsibility of nonprofit organizations. With time at a premium, wealthy people rely on a variety of advisors like you to help them make good decisions about many of their financial choices, and those can include decisions about charitable donations.
Now, regarding that second phenomenon. Whatever their personal experience with wealth advisors, fundraisers have come to realize that if their organizations are to get a share of the $15.5 trillion inter-generational transfer of wealth over the next 15 years, they must work with advisors to wealth such as you.
They must get to know you. Likewise, you must get to know them if you are to serve your clients -- be they individuals or families with private foundations -- best.
At the time the Banker’s Trust report was written, a minority of financial advisors were proactively asking their clients about philanthropy planning. In the ensuing years, things have changed, according to an article in the November/December 2004 issue of Advancing Philanthropy. It suggests four basic questions for advisors to bring to their clients:
- How do you prioritize your legacy: money, core values, or a combination?
- What amount of your estate’s assets is really needed to set aside for family members?
- What will be the tax bite, and will it allow for charitable giving?
- What are the financial vehicles that will accommodate their plans both for family and children?
Fundraisers have been asking questions like this for years, with their own motivation. Whatever the motivation, these fundraising questions are good ones and you can learn from them. Where can you go to meet fundraisers and learn what they know?
Most fundraisers belong to the Association of Fundraising Professionals (AFP) which also has chapters throughout the country. The organization serves two main purposes: to provide professional development (including a certification program), and to police its Code of Ethics. Most chapters hold monthly meetings. They also issue a Donor’s Bill of Rights that should be a useful document for your clients who are major donors. The web site for more information is
www.afp.org.
Another key group is the National Committee on Planned Giving (www.ncpg.org). Accountants, attorneys, insurance professionals, and financial advisors are all welcome to full membership in this group, although the majority of members are fundraisers. The NCPG also offers professional development programs, focussing on all aspects of planned giving from simple bequest planning to gift annuities to complicated trusts and limited partnerships.
There are other organizations for fundraisers who work in specific fields such as higher and private education, religious organizations, fraternal groups, and health care.
There are several good reasons for you to take out a membership in one of these organizations:
- Fundraisers will get to know and trust people in your field and will not discourage their donors from using your services.
- You will gain new knowledge about an area of your profession that is often given short shrift by your own professional society.
- You are likely to be invited to speak before the group about some area of expertise. This will give you credibility with an audience who can refer clients to you and help you build your practice. Networking never hurts.
You can strengthen your network and relationships with fundraisers at key nonprofits with a bit of turnabout: invite them to speak at your own professional society’s luncheon or at the Rotary.
There is a lot of two-way benefit to be had when you work with fundraisers and enlist them as allies. Rather than wait for dozens of them to knock at your door, trying to get their hands in your clients’ pockets, take the initiative to meet them on their own turf. Let them know how you work with your clients. Using their own professional language, you can set the ground rules for working together so that everyone in the equation comes out with a legacy of cooperation and success.
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