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February 2004
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March 2004

The Advisor's Role in Philanthropy

Do advisors, should advisors, encourage philanthropy? Should they, would they, facilitate civic-minded projects? Should they encourage their client's better angels? The studies below suggest (if you read between the lines) that tax, legal, and financial advisors are good at techniques and tools. But that donors had better bring their own ideals, and be prepared to manage the process, else those ideals may get lost in the shuffle. My hope with Gifthub is that we can help good people, on both sides, advisors and clients alike, meet on a footing that enables good things to be accomplished not only for client and family, but for society.

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Donor-Centered Philanthropy

You could call it citizen centered philanthropy, or planning to achieve civic, family, and personal goals. The point is that planning should begin with the client/citizen's ideals, as well as her or his finances, and produce results that have lasting and positive effect, in the light of those ideals. Here is a piece on Donor Centered Philanthropy that I gave a the National Conference of the National Committee on Planned Giving in 2002.

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Charitable Tools

I am often asked to explain various charitable tools. I do so reluctantly. Tools come last, after you have gotten to know the donor and what they want in life, for society, for themselves, family, and others. If you want to glance at the tools, and get a sense of what they do, that would be good. Just remember that explaining the tools and using them as part of an overall plan is the advisor's job. If you are a do-it-yourselfer, take up carpentry instead. Discussed or illustrated here are Charitable Remainder Trusts, Gift Annuities, Charitable Lead Trusts, Life Estate Reserved, and Foundations and their Alternatives.

Numbing? Yes! Intimidating? Yes? Daunting? Yes! That is why, I really think that charities and donors should put relationship and caritas way ahead of tools. Once you know what you want to accomplish from now until dusty death, and what legacy you want to leave for family and society, what kind of impact you want to have, then the tools will come into focus as means to those noble ends.

What you see here, friends, is the problem, the dysfunction, in miniature, the missed opportunity. If your own blood runs cold reading the technical stuff, so will other caring peoples'. Keep it focused on ends. Make friends in the advisor community. Forgive them for being so technical. Forgive them for these printouts, and the rest of the necessary tax rigmarole. Use the advisor to find the means to the ends. But, here among friends, let us try to keep the flame of love burning, because when that goes out, the rest is dust.

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Mission Statement for Donors

For idealistic citizens it makes sense to create a Mission Statement or "Request for Proposal" from financial, tax, and legal advisors. A sample is below. Why do it? Because otherwise advisors may, in all good conscience, steer the plan to what they would want if they were the donor, or to what their computer kicks out with standard boilerplate, or what generates fees and commissions for the advisor. Not that I object. The advisors should get paid. But, what they should get paid for is helping the client/donor achieve his or her goals. Here, then, is a sample of what I think donors might work up prior to shopping for an advisor.

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