How to Provide Philanthropic Planning in Seven Easy Steps
Share this
When is the last time you talked philanthropy with your clients? Was the discussion initiated by you or the client? If it was initiated by you, was it because you already knew the client is philanthropic or did you look at their tax return to see that they gave money the year before?
A 2013 study by U.S. Trust cites that a third of advisors believe they initiate the conversation around philanthropy while clients think that advisors only initiate the conversation 20% of the time.
But 88% of advisors think it is an important discussion to have with clients. We have a huge disconnect here! How can so many advisors see value in philanthropic discussions, but yet so few actually have the conversation?
Do You Provide Philanthropic Planning in Your Practice?
That is exactly where we were just a few years ago. We are a mature, established firm of skilled advisors. We claim to offer comprehensive financial planning and we think we do a great job.
But it wasn’t until a year and a half ago that our list of services started to specifically include philanthropic planning.
Don’t get me wrong. We would talk charitable giving with clients and even have a few clients who have established CRTs and used other charitable tools, but those discussions were spurred by the uncovering of intent in our fact-finding process.
The thought process went something like this: John and Jane Doe are selling their business this year. How can we lower the tax? Oh, wait, they like to give too. Perfect! Let’s talk charitable giving.
The U.S. Trust study results lead me to believe that we are not the only financial advisors who have had this misguided belief that this is a philanthropic conversation. I argue that it is not. It is certainly a valuable conversation for John and Jane, but it is essentially a tax conversation that has lead to a result that is philanthropic.
There’s a difference between having a philanthropic conversation and using a charitable tool to solve a problem. Donors get this, but unfortunately, it is taking advisors longer to catch on.
How We Can Change the Conversation
A small change in how we address the philanthropic conversation can strengthen our relationship with clients, set us apart from the rest of the industry, and create more gratifying and fulfilling work. There are two key components to a successful change in the philanthropic discussion.
First, you have to make the conversation important enough to have with every client. That doesn’t mean you have to push it on every client. Just ask the question.
Ask the client if it would be a valuable service to walk through a process to help identify ways to align their values with any charitable goals to give of their time, talents and treasures. If they aren’t interested, no problem, you at least know. If they are interested, you’ve just opened a door to another way you can offer value.
Secondly, always start with the “Why?” As advisors, we have taken on the role of a problem solver. That is how most of us function. We see a nail and we find a hammer.
But the most successful philanthropic conversations start with no intent of solving a problem. They start with the intent of finding meaning.
Why does this even matter to the client? What has happened in the client’s life to create a desire to be philanthropic? Once we know the why, we are better prepared to address the how.
These conversations can be difficult to start and put us outside of our comfort zone. The following seven step process will help you and the client uncover the why and turn it into actionable goals so you can provide philanthropic planning as part of your service offering.
Step 1: Identify Core Values.
We all have values that are core to who we are. These are often the values we find most attractive in other individuals.
Encourage your client to identify 3-5 core values with which he/she most identifies. You can simplify this process by creating a list of values from which clients can choose.
There are a number of free resources and value cards that can be purchased online to help with this discussion. Here are examples of core values:
Acceptance
Affection Bravery Community Compassion Courage Creativity Curiosity Dignity Diversity Empathy Equality Excellence Excitement |
Faith
Family Generosity Gratitude Healing Honesty Humility Innovation Integrity Joy Justice Knowledge Love Loyalty |
Mastery
Opportunity Passion Patience Peace Preservation Respect Responsibility Service Sincerity Stewardship Trust Truth Wisdom |
Step 2: Discover Passions
What is the client passionate about? What inspires action? For some clients, they will know this without having to give it much thought, but others will need some guidance.
Help clients target the most important 1-3 passions. Some passions may include:
Animals
Arts Children & Youth Community Development Domestic Violence Drug & Alcohol Abuse Education |
Environment
Health Homeless & Housing Human Rights International Land Preservation Literacy |
Poverty
Public Policy/Advocacy Religion Science & Technology Sports & Recreation Veterans Women |
Step 3: Find the “Sweet Spot”
Your client’s sweet spot will be the intersection between what is important and where a difference is needed. In Step 3, you help the client link values and passions by asking the following types of questions:
- Who? Is there a certain demographic that the client wants to target
- Where? Will the impact be local, national, global?
- What? Where is there an opportunity?
- Why? What is the motivation? Are there experiences that have shaped the client and would naturally lead the client toward an area of interest
- How? Will the client give time, serve on a board, volunteer, or use some other means to make an impact?
At the end of step 3, the client can develop a giving purpose statement. This is a mission statement for their giving.
One example may be, “I value innovation and community, and I have a passion for ensuring that everyone can receive the best health care; therefore, I will focus my giving of time, talents and treasures around advancing the medical field.”
Step 4: Research
You can offer to give resources or help the client research nonprofits in their area to determine the best way to apply their mission statement. Which nonprofits focus on the client’s area of interest? Is that nonprofit in good standing?
Some examples of research tools may include: the local Community Foundation, local Chamber of Commerce, United Way, Guidestar.org, CharityNavigator.org, VolunteerMatch.org, and so on.
Step 5: Set Goals
Combine steps 1-4 to help the client set goals around their giving. Remember SMART goals – specific, measurable, attainable, realistic, and timely.
Encourage the client to think about the end goal, the time horizon for achieving the goal and the boundaries around resources. For instance, a doctor may set the goal to give 10% of his time at the free medical clinic over the next year.
Step 6: Action Plan
You may have heard “goals not written are just wishes.” So write everything down! There’s power to putting thoughts on paper. There is a certain accountability that goes with writing out an action plan.
Encourage your client to embrace the accountability. Here’s an example of what the layout may look like:
Action Plan for ______ (YEAR) |
Step 1: Core Values Step 2: Passions
_________________________________ ___________________________________ _________________________________ ___________________________________ _________________________________ ___________________________________ _________________________________ ___________________________________ _________________________________ ___________________________________ |
Step 3: Giving Purpose ____________________________________________________________________________________
____________________________________________________________________________________ ____________________________________________________________________________________ |
Step 4 & 5: 12 Month Goals
Goal #1 _______________________________________________________________________ Time Horizon:__________________________________________________________ Budget/Talent/Time Commitment: _____________________________________ _______________________________________________________________________ Time Horizon:__________________________________________________________ Budget/Talent/Time Commitment: _____________________________________ _______________________________________________________________________ Time Horizon:__________________________________________________________ Budget/Talent/Time Commitment: _____________________________________ |
Step 7: Reflection
Reflection is a crucial, yet often overlooked step in any plan. Help your client monitor his/her progress by checking in for a review at least once a year. Evaluate what happened and what did not happen.
This is also a great opportunity to reset the plan for next year. Going through the reflection process allows the client to identify the successes and the challenges and adjust for the future.
Starting a conversation around philanthropic planning with clients is a great way to add value to your services. It doesn’t have to be an uncomfortable or difficult discussion. It is possible to simplify the process so that clients can implement a plan regardless of where they are on their journey and how they want to give.
About the Author
Jessica Hovis Smith is a Certified Financial Planner™ and Director of Financial Planning at Longview Financial Advisors. Outside of the office, Jessica is an avid runner and enjoys spending time outdoors with family and close friends. You can reach her on Twitter @jhovissmith or connect with her on LinkedIn
Share this
- Advisor Posts (423)
- Fee-only advisor (369)
- Advice (305)
- Blog (300)
- Independent Financial Advisor (194)
- Fee-for-service Financial Planning (133)
- Business Development (125)
- Running a Firm (109)
- Marketing (94)
- What Would Arlene Say (WWAS) (81)
- Firm Ownership (77)
- Practice Management (77)
- Training (76)
- Executive Coaching (70)
- Business (69)
- Business Coach (68)
- Building a Firm (64)
- Compliance (64)
- Financial Planning Firm (63)
- Growing Your Firm (61)
- Financial Advisors (59)
- XYPN LIVE (54)
- RIA Marketing (50)
- RIA Compliance (48)
- From XYPN Members (47)
- Starting a Firm (47)
- Technology (45)
- Fee-only Financial Planning (40)
- Advisors (38)
- Entrepreneurship (38)
- Marketing Your Firm (38)
- Prospecting (36)
- Conference (35)
- XY Tax Solutions (XYTS) (34)
- Investment Management (32)
- Tax Planning (32)
- Interviews and Case Studies (31)
- Marketing Strategy (30)
- Growing Business (29)
- Launching a firm (29)
- XYPN Invest (28)
- Tax Preparation (26)
- Business Owner (25)
- Business Strategy (25)
- Managing a Firm (24)
- Team Building (23)
- Marketing Funnel (22)
- Diversity (21)
- Annual Conference (20)
- Getting Clients (20)
- Sales (20)
- Small Business Owner (20)
- Social Media (20)
- Financial Planning Conference (19)
- Chief Compliance Officer (COO) (18)
- From XYPN Invest (18)
- Marketing Resources (18)
- Business Model (17)
- Client Relationships (17)
- Content Marketing (17)
- Financial Planners (17)
- Hiring (16)
- Independent Financial Planner (16)
- Niche Marketing (16)
- Setting Goals (16)
- Tax Savings (16)
- Website Development (16)
- XYPN News (16)
- Business Vision (15)
- Sales Process (15)
- XYPN (15)
- Business Growth (14)
- Email Marketing (14)
- Financial Advice (14)
- Networking (14)
- Media (13)
- Press Mentions (13)
- RIA (13)
- Tax (13)
- Advertising (12)
- Goals (12)
- Assets Under Management (AUM) (11)
- First Year (11)
- Investing (11)
- Next Generation Financial Planning (11)
- Niche (11)
- RIA Owner (11)
- Sales Pipeline (11)
- Current Events (10)
- Filing Taxes (10)
- Financial Coaching (10)
- Fintech (10)
- Taxes (10)
- XYPN Membership (10)
- Year-End Tax Planning (10)
- Advisor Success (9)
- Client Management (9)
- Inbound Marketing (9)
- RIA Registration (9)
- SEC (9)
- Communication (8)
- How to be a Financial Advisor (8)
- Lessons (8)
- Study Group (8)
- Time Management (8)
- Branding (7)
- Digital Content (7)
- Financial Planning (7)
- Financial Planning Fees (7)
- Financial Planning Process (7)
- Growth (7)
- Mental Health (7)
- Pricing Models (7)
- Virtual Advisor (7)
- Business Plan (6)
- From Our Advisors (6)
- Mentorship (6)
- Motivation (6)
- Risk and Investing (6)
- Tax Season (6)
- Abundance Mentality (5)
- Advisor Website (5)
- Automation (5)
- Behavioral Finance (5)
- Client Experience (5)
- Client Service Model (5)
- Clients (5)
- Connection (5)
- Filing Status (5)
- Inclusion (5)
- Investment Planner (5)
- Marketing Plan (5)
- Michael Kitces (5)
- Money Management (5)
- Outsourced Tax Services (5)
- Processes (5)
- Racism (5)
- Real Financial Planning (5)
- Retirement (5)
- S Corpration (5)
- Support System (5)
- TAMP (5)
- Tax Return (5)
- Transitioning Advisor (5)
- Wealth (5)
- AdvisorTech Expo (4)
- Bear Market (4)
- Broker-Dealers (4)
- CFP Certification (4)
- College Planning (4)
- Continuing Education (4)
- Independent RIA (4)
- Lead nurturing (4)
- Market Volatility (4)
- Marketing Coaching (4)
- Online Marketing (4)
- Outsourcing (4)
- Professional Development (4)
- Scaling Firms (4)
- Search Engine Optimization (SEO) (4)
- Selling a Firm (4)
- Small Business (4)
- Succession Plans (4)
- Tax Forms (4)
- Transitioning Clients (4)
- Virtual Meetings & Events (4)
- XYPN Radio (4)
- Year-End (4)
- Annual Review Process (3)
- Benchmarking Study (3)
- Budgeting (3)
- Client Avatars (3)
- Community (3)
- Company Culture (3)
- ESG Investing (3)
- Emotional Decisions (3)
- Engagement (3)
- Fiduciary (3)
- Financial Life Planning (3)
- Getting Leads (3)
- Google Analytics (3)
- How to be a Successful Entrepreneur (3)
- IRA (3)
- Industry Trends (3)
- Initial Sales Call (3)
- Life planning (3)
- Lifestyle practice (3)
- Market Downturn (3)
- Membership (3)
- Monthly Retainer Model (3)
- Paid Marketing (3)
- Partnership (3)
- Pricing (3)
- RIA Audit (3)
- Recordkeeping (3)
- Risk Assessment (3)
- Scaling Up (3)
- State Registration (3)
- Staying Relevant (3)
- Tax Extension (3)
- Tax Firm (3)
- Tech Stack (3)
- Unhappy Clients (3)
- Value Proposition (3)
- Wellness (3)
- Work Life Balance (3)
- Workplace Issues (3)
- Advice-Only Planning (2)
- Bookkeeping (2)
- Certified Public Accountant (CPA) (2)
- Changemaker (2)
- Charity (2)
- Coaching (2)
- Community Property (2)
- Conflict Management (2)
- Design (2)
- Differentiation (2)
- Employee Benefits (2)
- Entrepreneurial Operating System (EOS) (2)
- Exchange-Traded Funds (ETF) (2)
- FINRA (2)
- Feminism (2)
- FinTech Winner (2)
- Finding Your Why (2)
- George Kinder (2)
- Graphic design (2)
- Growing Income (2)
- Health Care (2)
- Ideal Clients (2)
- Inflation (2)
- Investment Adviser Representative (IAR) (2)
- Key performance indicator (KPI) (2)
- Keynote (2)
- Learning (2)
- Local Meet-ups (2)
- Mastermind Group (2)
- Members (2)
- Monthly Subscription Model (2)
- Negative Rates (2)
- Organization (2)
- Outsourced Asset Management (2)
- Outsourced Bookkeeping (2)
- Personality Types (2)
- Portfolio Management (2)
- Productivity (2)
- Psychology (2)
- QuickBooks Online (QBO) (2)
- Recommended Reading (2)
- Registered Representative (2)
- Registration (2)
- Restricted Stock Units (RSU) (2)
- SEC Regulation (2)
- Scott Snider (2)
- Solo Advisor (2)
- Start Ups (2)
- Stock Options (2)
- Target Market (2)
- Tax Refund (2)
- Team Communication (2)
- Value of Financial Planning (2)
- Video Production (2)
- Virtual Assistant (2)
- Virtual Paraplanner (2)
- Yields (2)
- Accounting (1)
- Advisory Board (1)
- Analogies (1)
- Anti-harassment (1)
- Arlene Moss (1)
- Assistant (1)
- Behavior Gap (1)
- Bonds (1)
- Books and Records (1)
- Broker Protocol (1)
- Broker Recruiting (1)
- Bull Market (1)
- Buying a Firm (1)
- Career Changers (1)
- Careers (1)
- Carl Richards (1)
- Carolyn Dalle-Molle (1)
- Cassandra Worthy (1)
- Charitable Donations (1)
- Charitable Giving (1)
- Childcare (1)
- Common Financial Mistakes (1)
- Compassion (1)
- Consulting (1)
- Consumerism (1)
- Continuity Plan (1)
- Creatives (1)
- Credit (1)
- Cryptocurrency (1)
- Custodians (1)
- Custody Rule (1)
- Dan Sullivan (1)
- Data (1)
- Definitions (1)
- Designations (1)
- Direct Indexing (1)
- Disasters (1)
- Dr. Sean Stephenson (1)
- Earn More (1)
- Education (1)
- Elizabeth Dunn (1)
- Enrolled Agent (EA) (1)
- Entity Election (1)
- Entrepreneur Myth (1)
- Equity (1)
- Event Planning (1)
- Events (1)
- Family (1)
- Fee-Based Financial Planning (1)
- Fidelity (1)
- Finance (1)
- Financial Freedom (1)
- Financial Goals (1)
- Financial Life Management (1)
- Financial Planning Platform (1)
- Financial Preparedness (1)
- Financial Wellness (1)
- Form 8606 (1)
- Form 8915-E (1)
- Form ADV (1)
- Gen X (1)
- Gen Y (1)
- Gen Z (1)
- Google Search Ads (1)
- Graduates (1)
- Grief (1)
- Guide (1)
- How I Did It series (1)
- How to Budget (1)
- Human Resources (HR) (1)
- Impact Investing (1)
- Impostor Syndrome (1)
- International financial planning (1)
- Interns (1)
- Introverts (1)
- Investor Policy Statement (IPS) (1)
- Job burnout (1)
- Job description (1)
- Job posting (1)
- LLC (1)
- Lead conversion (1)
- Lending (1)
- Liquidating your business (1)
- Loans (1)
- Merging Practices (1)
- Michael Gerber (1)
- Miguel Gomez (1)
- Millennials (1)
- Mission (1)
- Moira Somers (1)
- Moving Forward (1)
- New Planner Recruiting (1)
- NextGen (1)
- NextGen Clients (1)
- Online Courses (1)
- Orion (1)
- Part Time (1)
- Paying Yourself (1)
- Paystub (1)
- Perfectionism (1)
- Professionals (1)
- Project Management (1)
- Projecting Returns (1)
- Purpose (1)
- Quarterly Estimated Payments (1)
- ROI (1)
- Recession (1)
- Recruiting (1)
- Referrals (1)
- Regulators (1)
- Reinvention (1)
- Relationships (1)
- Remote (1)
- Required Minimum Distributions (RMD) (1)
- Retreats (1)
- Risk Management (1)
- Roth Conversations (1)
- Roth IRA (1)
- Sabbatical (1)
- Saying No (1)
- Scaling (1)
- Schedule Management (1)
- Schwab (1)
- Sean Stephenson (1)
- Sequence Risk (1)
- Slow Season (1)
- Small Business Bookkeeping (1)
- Socially Responsible Investing (SRI) (1)
- Spending (1)
- Stop Saying Should (1)
- Strategy (1)
- Supervisory Procedures (1)
- Supporting Clients (1)
- Systems (1)
- Target Audience (1)
- Teamwork (1)
- Terms (1)
- Tim Maurer (1)
- To-Do List (1)
- Total Return Approach (1)
- Traditional IRA (1)
- Transitions (1)
- Virtual (1)
- Vulnerability (1)
- WRAP Programs (1)
- Women (1)
- XY Learning Center (XYLC) (1)
Subscribe by email
You May Also Like
These Related Stories

3 Steps to Improve Your Practice as a Financial Advisor by Taking Your Own Advice

An Advisor’s Best Friend: The Ability to Say “No”
