Advancing Philanthropy

Perspectives—Collaborating with Advisors to Grow Blended Gifts

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illustration of a gift box with a box tied around it

A donor-centered approach where we meet the needs of our donors is an ideal way to build a fundraising program. Yet when we look to understand our donors and match their interest in our mission with a way that they can give, we may be leaving money on the table. In fact, a growing number of donors have less of their assets in cash, meaning that asking for major gifts can make for an awkward moment where the focus shifts from a donor wanting to support their favorite charity to a situation where they might have no other option than to say no.

Blended gifts, where we offer options to our donors that match their interest with their ability to give in a way that also helps them and their loved ones, can be a perfect solution. Many have heard of charitable gift-planning options from their professional advisers. In fact, one study showed that nearly 70 percent of charitable remainder trust donors reported first learning about the option from their advisers.

An increasing number of charitable gifts are being structured by professional advisers, and very often, the charities that stand to benefit are not even included in the conversations. This is an unfortunate development, since charitable gift planners can assist advisers by providing information about services offered by the charity, motivations for giving, and charitable gift options. The adviser can then focus on his or her practice area. Together, advisers and gift planners can structure the right gift, with the right asset, at the right time, toward the right project, for the right cause.

Similarly, charities can no longer work directly with their top donors without involving professional advisers. These valued advisers have access to the important details about their clients’ tax, estate, and financial planning. Their expertise is critical to the philanthropic planning matrix. Charities, donors, and professional advisers must work collaboratively to coordinate all the different variables to fully integrate donor wishes into overall planning. When such an approach is implemented, the result is the creation of overall plans that:

  • Meet donor personal planning goals
  • Reinforce and pass donor values to future generations
  • Create meaningful legacies for the donor, the donor’s family, and the charities the donor supports

These combined charitable, estate, and financial plans will be tax-efficient and values-based, ensuring that the donor/client is able to realize a vision of philanthropy. They often allow for a blended gift (both a major and planned gift) that incorporates the best strategy for the situation.

DISPELLING THE MYTHS: COMPETING OR COMPLETING

There is a common misconception that charitable gift planners and professional advisers are in competition with each other. The perception in the gift-planning world is that advisers discourage donors from making a gift to a favorite charity because either the adviser does not understand the workings of the gift plan or does not value the individual’s charitable intent. Similarly, many professional advisers are hesitant to include fundraisers in their conversations with clients because they could slow the process or suggest gift structures that do not work in the context of the plan. To maximize the benefits for the donor/client, fundraisers and advisers need to learn to work collaboratively. As Robert Sharpe Jr. points out, fundraisers and advisers should look toward completing instead of competing. By working together, a gift planner and the donor’s adviser can help the individual make an informed decision. Through education and a relationship with their local fundraisers, advisers can begin to develop a new part of their practice and help many worthy causes that support their communities.

I have been fortunate to know many advisers who have not only assisted their clients with crafting gifts to support their favorite charities but several who also made personal major gifts to my organization due to their belief in the mission. One of the closest relationships that I enjoy with a professional adviser evolved out of a phone call I made in the fall of 2012 to advisers who were members of the Estate Planning Council of Northern New Jersey. I called one and asked for 20 minutes to meet at his office in Ridgewood, New Jersey. As we all know, giving busy people a chance to take an appointment at their office gives them little downtime, except for their time during your meeting. When I arrived, the gentleman said, “In more than 25 years as a certified financial planner [CFP), this is the first time a planned giving officer [PGO) has called me.” We had a great first meeting, ended up mutually deciding to extend it an additional 20 minutes, and have since forged a wonderful collaboration that has led to many donor/client meetings, many referrals, and several business trips and speaking engagements together, as well as more than $5 million in planned gifts. Paul W. Hansen, CFP, CLU, ChFC, CSPG, CAP, is a terrific example of a professional adviser who understands philanthropic planning and has aligned his practice at Morgan Stanley with the nonprofit sector to be a resource for charities and to grow his assets under management.

PHILANTHROPIC PLANNING WITH ADVISERS CAN LEAD TO A PLANNED GIFT

In another example of how advisers can assist with closing gifts, I recall that an annual donor had made several gifts to one of the hospitals at Hackensack Meridian Health. An astute development officer knew that she had the capacity for a planned gift but wasn’t sure how to proceed. She asked if I would meet with her, and the three of us met. The donor told me how she loved the hospital and how she had been helped on at least two occasions by them with her health. She was a grateful patient and a breast cancer survivor. She said she wanted to make a gift but needed income. After discussing a charitable gift annuity (CGA), she said she loved the idea and decided to make a $10,000 gift to fund a CGA. When the development officer and I met her for a stewardship lunch later that year, she said she wished she could do more but was worried as a widow about who would take care of her. Because of this, she was keeping part of her accounts to assist with her long-term care. I then asked her, “If there was a way we could provide you with a solution to that issue, would you be interested?” She said yes, so I let her know that I wanted to introduce her to a few advisers who might be able to help her.

Our plan was to meet with three to four and let her pick which one she liked. She asked me to join her at lunch with each, but after five minutes with the first one, she said, “He’s the one.” She really liked Rick Nelson, a senior vice president and wealth management adviser with Merrill Lynch. Rick is one of those advisers who takes time with his clients. As his website says, he and his team are “deeply experienced and passionate advocates for financial wellness.” He heard what she needed to accomplish and offered her several options, including how she could add the coverage she wanted to her already-existing long-term care policy as well as create a charitable remainder unitrust that would work with the rest of her portfolio to provide the income she needed in retirement while also allowing her to make a $250,000 gift to support the nurses’ station in the new cancer center at her hospital. She was thrilled. In the process, Rick and I introduced her to Jason L. Wyatt, Esq., who helped to create the trust and is also an elder law specialist. She asked why we suggested a younger attorney. We explained that Jason would still be practicing when she needed his help in 10–20 years, while many of the attorneys that are her age may be retired by then. She liked the idea of getting to know someone who could grow old with her and would be there to offer advice later in her life.

This case is a great example of how being donor-centered and making the needs of the donor the priority for the whole team can lead to a planned gift that matches the circumstance and serves the best interest of the donor. As Jason and his partner have stated, “Charitable motivations and intentions are an important part of estate planning for many clients. These intentions can often be carried out in a way that mutually benefits one or more charities as well as family and friends.”

MODEL FOR PHILANTHROPIC PLANNING

MODEL FOR PHILANTHROPIC PLANNING
HOW TO ENGAGE PROFESSIONAL ADVISERS

The people and tools of philanthropic planning provide donors with the ability to meet both their personal planning objectives and philanthropic goals to leave a more meaningful and lasting legacy. To accomplish the goals of our donors, we must learn to work with professional advisers, who we are told have the greatest impact on their clients—our donors. Based on research and work with 563 advisers in the New York metropolitan area, I developed the following best practices for you to use when working with advisers to build relationships that will lead to more gifts for your organization.

Seven Proven Ways to Develop Support From Advisers

  1. Look to your organization’s own board and volunteers for advisers who already support you in some way. Meet with them and get to know what they do. Discover how the fundraiser and adviser can develop more opportunities for success together.
  2. Provide helpful materials to advisers who regularly meet with individuals. The Federal Tax Pocket Guide is one useful reference tool. Create other guides that can assist them with this mission. Share brochures with them so they might provide them to the appropriate clients.
  3. Create a board of advisers—that is, a group of advisers who can provide assistance in special cases involving complex gifts and can also meet periodically to discuss ways to prospect and market your organization’s need for support to the community. Not only is their expertise invaluable in certain circumstances, but many advisers have also become wonderful marketers as they have grown their own businesses. While at Meridian Health Foundation, I created the Meridian Philanthropic Planning Council to serve as a resource for the efforts to support the health system.
  4. Bring them in on cases that need an expert. Consulting with them early on can mean the difference between a “yes” and a “no.” And don’t forget how advisers make a living. Opportunities for both your organization and the adviser will go a long way to strengthen the relationship and their future support.
  5. Encourage their involvement in projects or special events that can be helpful to them and your organization. If advisers become a part of what the organization does, they will grow in their understanding of the mission. I have also been fortunate to engage a few advisers who even made five- and six-figure gifts of their own.
  6. Invite an adviser to bring a client they feel is interested in your organization to an event. In turn, the fundraiser should invite a donor who might need some of the services provided by the adviser. Try this at events such as a golf outing. The donor can spend the round riding in the cart with the adviser, while the fundraiser has the chance to get to know the adviser’s client in a comfortable setting over a six-hour period.
  7. Offer referrals. One of the best ways to increase support from advisers is to offer them referrals. Since they, like fundraisers, are looking to gain new opportunities to grow their businesses, referring a possible new client to them and even introducing them to a fellow adviser who might be a resource for them are both welcomed and appreciated.

By looking at donors/clients through the eyes of professional advisers, fundraisers can better understand the relationship and how they can effectively fit into it.

STEPS FOR FUNDRAISERS TO ENHANCE COLLABORATION WITH ADVISERS

The rare individual who unselfishly tries to serve others has an enormous advantage. He has little competition.

—Dale Carnegie

Fundraisers can expand their reach with engaged professional advisers who understand philanthropic planning and how it can help grow their practice. Consider the following steps to begin the process of cultivating and building sustainable relationships with interested professionals.

  • Identify advisers with interests in the charitable giving market.
  • Educate advisers about philanthropic tools and types of gifts.
  • Support advisers in their businesses.
  • Educate advisers about your organization’s mission.

Once the fundraiser has identified the professional advisers to be approached, reach out to them (or better yet, get a referral to them) and set up an appointment. For the first meeting, plan to arrive on time, and consider the following:

  • Offer your greeting.
  • Offer a “Resource Notebook” or similar resource.
  • Share a “Sample Charitable Gift Annuity Proposal.”
  • Ask, “What can I do to help you grow your business/practice?”
  • Discuss seminar and business-cultivation opportunities.
  • Offer referrals.
  • Ask for referrals.

After the meeting, be sure to follow up with a call or letter. Additionally, consider the following:

  • Send a thank-you note.
  • Offer a referral to another adviser.
  • Send an additional resource.
  • Continue a discussion about upcoming events.
  • Invite the adviser to a golf outing, gala, research tour, etc.
  • Send an annual letter with the new Federal Tax Pocket Guide.
  • Make a quarterly phone call or send an email.
  • Send additional referrals.
  • Ask for referrals.

Charities should create a packet of materials that might be helpful to professional advisers or serve to educate them about charitable options. The following tools have proven useful:

  • Planned-giving resource notebook
  • Gift-planning newsletter
  • Quarterly charitable estate planning updates
  • Federal Tax Pocket Guide (updated annually)
  • Gift-planning options pocket guide
  • Client support (Q&A resource and proposal service)
  • Leave-behinds: Cookbooks, an atlas, Estate Planning for Women, Estate Planning for Small Business Owners

MEASURE THE SUCCESS OF YOUR PARTNERSHIPS WITH PROFESSIONAL ADVISERS

To evaluate whether partnerships with advisers are working, charities should develop benchmarks. Each year, the charity can compare its performance against the benchmarks and prior years to determine whether it is doing a good job of engaging advisers and ultimately creating opportunities for philanthropic planning.

Understanding, balancing, and, in some cases, reconciling the interests of various parties is the key to successful philanthropic planning efforts.

To reach its goals, a charity should create a plan and establish its agenda. Make performance dashboards and work with a sense of urgency. Prioritize and complete what matters most first. Know what the goal is and keep it in focus while working on the plan. Prepare for activities, and be responsible for the vision of success. In the end, the number of gifts closed as an outcome of activity with professional advisers will be the best evidence of how the work is leading to results.

With the donor’s financial well-being and personal motivations to give as a common denominator, professionals from the for-profit and nonprofit worlds can work together toward a common goal. The ability to know when to lead and when to follow in each situation, along with a willingness to compromise, is a must. Understanding, balancing, and, in some cases, reconciling the interests of various parties is the key to successful philanthropic planning efforts. Many donors/clients are interested in supporting their favorite charities. Working together toward opportunities for blended gifts can grow support for your organization.

Robert E. Wahlers, M.S., CFRE,Robert E. Wahlers, M.S., CFRE, is president of PEAK Philanthropic, LLC, a gift-planning consulting firm. Along with his co-author, Brian M. Sagrestano, J.D., CFRE, Robert has written three books, including The Philanthropic Planning Companion: The Fundraisers’ and Professional Advisors’ Guide to Charitable Gift Planning, published by Wiley. Their work earned them the AFP/Skystone Partners Prize for Research on Fundraising and Philanthropy in 2013.

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