Search form



Transfer of wealth: Following the money

“The greatest wealth transfer in modern history has begun,” according to a mid-2021 report in the Wall Street Journal. And, with tax reform’s big bite into estate values off the table, at least for now, many of your older clients may be thinking seriously about their legacies. And these legacies will be significant. As of March 31, 2021, according to data collected by the Federal Reserve, Americans in their 70s and older had a total net worth reaching almost $35 trillion. By 2042, an estimated $70 trillion will change hands, including an estimated $9 trillion flowing to charities, according to research conducted by Cerulli Associates. As you advise an older client, an important part of the conversation might be to determine the best charitable giving vehicles to achieve your client’s community goals, particularly evaluating the potential role of a Donor Advised Fund or private foundation. Increasingly, your clients are learning about their options in mainstream media and likely have a greater level of awareness about charitable giving options than ever before, especially in the wake of the recent twists and turns concerning potential tax reform. Read more for key points we suggest to keep handy for those conversations.

Giving hard-to-value assets: It’s not just for real estate anymore

You are no doubt familiar with the many benefits of giving hard-to-value assets to a charity – and especially to a client’s Donor Advised Fund at the Community Foundation. Because the Community Foundation is a public charity, your client is eligible for the maximum allowable tax deduction for their contributions. This is because a client typically can deduct the fair market value of the asset given to the fund, and, furthermore, when the fund sells the asset, the Community Foundation (as a public charity) does not pay capital gains tax. This means there is more money in the Donor Advised Fund to support charities than there would be if your client had sold the hard-to-value asset on their own and then contributed the proceeds to the Donor Advised Fund. Individuals can take advantage of giving hard-to-value assets, and so can businesses. For example, when a business is sold, its owners may find themselves with artwork, insurance policies, or real estate on their hands, any of which can be donated to a Donor Advised Fund with the favorable tax treatment described above. Gifts of real estate have long been popular – although still underutilized – gifts to charity, sometimes making up nearly 3% of the value of all charitable contributions in any given year.

Philanthropy and the family business: A chance to ask great questions

More than half of the country’s gross domestic product (GDP) is generated by the 5.5 million family-owned businesses in the United States. Profits aren’t the only priority for most family businesses; the vast majority of family business owners report that other factors, such as culture, community, charity, and values, are also important to the business. Although it is not surprising that philanthropy is a vital part of the family business fabric, setting up the right structure to leave a legacy is not without challenges. As you advise a business-owner client, consider asking the following questions to help your client create or grow an effective corporate philanthropy program within the family enterprise.

Helping Families Stay Connected Across the Miles and Generations

Your philanthropic clients will thank you for suggesting they consider giving a charitable gift in the form of a charitable fund instead of the more typical “I made a gift to my/your favorite charity in your honor.” More and more parents and grandparents (and friends and colleagues) are giving a child, grandchild, friend, or co-worker a charitable fund, pre-established and pre-funded, in the name of the recipient. Frequently taking the form of a Donor Advised Fund, this gift allows the recipient to experience the benefits of working with the Community Foundation to support important causes. Read more.