Starting the Philanthropy Conversation in Three Simple Steps

NPT UK’s recently published UK Donor-Advised Fund Report confirms that donor-advised funds (DAFs) are increasingly used by private clients for their philanthropic giving. Despite economic uncertainty and political turmoil around the world and the recent cost-of-living crisis in the UK, donors have responded with unprecedented compassion and generosity. We are encouraged by the increase in conversations between clients and their advisors about philanthropy and know that clients benefit from guidance regarding how their wealth can have a positive impact.

Here are three areas to consider as you approach these philanthropic conversations with your clients:

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1. What is the reason your clients are giving?

Understanding what drives your clients or stirs their passions will enable you to help them achieve their philanthropic goals. Start by asking what they want and then work out what they need. We find that focusing on personal goals and interests as well as the technical aspects of giving helps advisors approach these conversations in a meaningful way. Leading questions might be: what matters most to you—short-term change or long-term legacy? Do you have a personal connection to one particular issue? What values or principles might guide your approach to giving?

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2. Does your client have a giving plan?

Now that you have helped your clients set their objectives for giving, the next step is to help them develop a plan to achieve their goals. Initially, you want to help your clients determine what is the best philanthropic vehicle for them to use in terms of tax efficiency and administration. Is a charitable trust or foundation necessary, or can they manage their giving through a donor-advised fund, which is more efficient and streamlined? Have they set a budget? Are they interested in impact investing? What assets can they leverage? Do they want to involve their family? Knowing these answers should provide you with a way to help your clients develop a successful strategy for their giving.

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3. Which charities should your client support and how best to support them?

This is the most important element of your clients’ philanthropic plan. There may be many charities working on the same causes or mission, so you can guide your clients to consider how to achieve the impact they want. Do they want to work in their own local community or in a larger region, nation, or even worldwide? How important is the charity’s size or track record to the clients? Would your clients want to volunteer their time and knowledge to a charity, in addition to their funds, in order to achieve greater impact and a sense of personal satisfaction? Do your clients want to support on-going, proven work or help organisations explore new programs and solutions?

We hope these conversation-starting questions will help you help your clients develop a rewarding plan to meet their philanthropic goals.

For more information on how NPT UK can support your clients’ philanthropic journey, please contact us.