Your Clients and Their Giving

Starting the Charitable Discussion is Easy

Your clients may have questions about how to achieve their charitable goals or how to maximize their philanthropic efforts to make an impact today and beyond their lifetime.

Some clients may not be aware that charitable giving can be a very effective part of financial and estate planning. Others may consider philanthropy for the first time after a milestone or transitional event creates the time, interest, or wealth to explore that possibility.

Discussing philanthropy can be easy. The important first step is to ask, “Are there any charitable or community needs you currently support or would like support in the future?” The answers can set a course.

These charitable discussions can enhance your services and deepen your relationship with clients and their families. It presents a trifecta win that benefits your practice, supports your client, and aids our communities.

Charitable Giving in Estate Planning: Are Your Clients Interested?

Before integrating charitable giving into your client’s estate planning, you must evaluate their level of interest. Based on our experience, we suggest seven questions to help get the process started. We can also provide information and tools to address these questions and concerns more fully.

  1. Do your clients care deeply about the local community, and engaged in it through giving, volunteering, or services received?
  2. Do your clients give to one or more charitable causes?
  3. Do your clients have interests in establishing a personal or family legacy in their community?
  4. Have your clients considered establishing a private foundation, including looking at the related costs, privacy, and administrative complexity that may affect their philanthropy?
  5. How important is it for your clients to receive maximum tax benefits for their charitable contributions?
  6. Are your clients focused on the financial management of their philanthropic contributions?
  7. Are your clients concerned about future changes at the nonprofits they support, wanting to ensure their gifts remain relevant if these organizations cease to exist or change missions?

“The Community Foundations of the Hudson Valley offers flexible options and deep knowledge to manage and oversee your charitable funds. It is overseen by local, trusted people who vet and distribute the funds to worthy organizations.”

Joseph Divestea,
Crpc, Managing Director, Senior Vice President Investments, Divestea Wealth Partners Of Raymond James

Portrait of Joseph Divestea

Navigating Life Transitions and Philanthropy

Life is full of transitions. Navigating these moments may prompt reflection on your client’s values and priorities. These events may also be major ‘taxable events.’ Philanthropy can offer unique opportunities to help alleviate financial challenges and align charitable actions with evolving values and circumstances.

Receiving an inheritance, finalizing a business sale, or experiencing another type of financial event can prompt an assessment of priorities and how to allocate finances effectively. These events present an opportunity to develop charitable planning strategies that support your client’s long-term philanthropic goals.

Family events such as marriage, divorce, the birth of a child, or the loss of a loved one, can inspire philanthropy. These events often create a desire to develop charitable planning strategies that support family values and establish lasting legacies.

Retirement often provides more time for volunteer work, serving on nonprofit boards, and other community involvement. It may also trigger a Required Minimum Distribution from an IRA, which increases taxable income. These factors can fuel philanthropic plans that are both personally rewarding and tax-smart.

As wealth and values pass to the next generation, discussions about charitable giving and legacy planning become important. This planning is essential to ensure philanthropic ideals endure.

Giving Scenarios

A Donor-Advised Fund (DAF) at CFHV provides an attractive alternative to private foundations that must address regulatory requirements and administrative burdens. With DAFs, our professional staff handles all administrative and grantmaking activities, allowing your clients to focus on the rewards of supporting their favorite causes. In addition, a DAF at CFHV offers greater tax benefits and privacy due to our status as a public charity.

If your client has a private foundation and wants to convert to a DAF, you can take advantage of our services. We have extensive experience transitioning all or part of the assets of a private foundation to a DAF.

You may have a client ready to sell a business, typically creating a significant taxable event. One effective way to avoid some tax liability is donating a partial interest or equity in that business to CFHV and creating a charitable fund that carries out your client’s philanthropic goals.

Making a charitable gift before the sale of a business, whether to a DAF or charitable remainder trust, provides maximum tax advantages. Your clients can avoid capital gains tax on the sale of the contributed business portion and claim an income tax deduction based on its fair market value. The buyer would then purchase that portion of the business from CFHV, a tax-exempt organization.

In contrast, when a gift is made from proceeds following a business sale, the donor will have paid a capital gains tax on 100% of the price. The only tax benefit would come from the income tax charitable deduction.

For many of your clients, planned giving may be as simple as including CFHV in their wills. Donors may leave a percentage share of their estates, specify a dollar amount, or designate us as a contingent or residuary beneficiary.

An easy way to support charitable interests at CFHV is through a bequest that supports our communities while allowing your client to retain complete control over the assets during their lifetimes. Bequests can be set as a specific dollar amount, a percentage of an estate, or what remains after other bequests, such as those to family members, are satisfied.

If you have questions,