Clients and Goals: Why Staying Asset Savvy Matters

For Professional Advisors


You're advising your clients about their retirement goals, their goals for supporting their children and grandchildren, and their goals for the legacy they intend to leave to the community causes they care most about.

In all of the planning work you're doing for clients, you know assets matter to achieving goals. This is certainly the case in philanthropy planning. How many of your clients are still supporting their favorite causes with cash gifts? That's not tax efficient, as you know.

If your clients are holding highly-appreciated assets, such as stock or real estate, and they are planning to make a significant gift to charity, consider advising them to give the appreciated assets instead of cash. Assets like appreciated stock can be sold by the charity for 100 cents on the dollar--no capital gains tax applies. That means the charity ends up with more money to work with than the client would if the client had sold that same asset. 

You have a responsibility to advise your clients about the best charitable giving vehicles to meet their goals. Frequently, a donor-advised fund at the Community Foundation is the best solution. (There is a reason donor-advised funds are growing three times faster than private foundations!)

If your client wants to support several charities all at once but has a single large asset that would be perfect to contribute, encourage your client to consider using a donor-advised fund to facilitate the contributions. The client can transfer the asset to the fund, get the tax benefits, have the asset converted to cash, and then allocate the proceeds to several different charities of the client's choice. The proceeds can even be held in an endowment fund to ensure long-term support of a favorite cause, or used to create an unrestricted fund in the client's name managed by the Community Foundation to support the community's greatest needs now and in the future. 

Be sure to think outside the box. Sometimes even artwork, jewelry, antiques, limited edition books, and other collections can be contributed to a donor-advised fund with excellent results for your client and the community.

Your Community Foundation team can help you structure the best philanthropy plan for your clients, their families, and the communities they love.