To those with financial capacity and the desire to have an impact on something larger than self, heirs, and dog:
- Advisors of routine abilities have a process, taught them by their firm, using firm-provided software, that guides you the client step by step to solve the needs you share with everyone else, prudently for you and profitably for the advisor and the firm. This is called "doing bidnis."
- Advisors of exceptional abilities, at the top of their game, outgrow the basic systems. For them as they work with clients of exceptional capacity, the key question is, "What is the theme of the case?" The theme is the need, want, passion that drives the process. The theme is one that unites and drives forward the things the client needs and wants to do, prudently and profitably for client and advisor. This is called "meeting and exceeding client expectations," or it is called "excellence."
Now, your desire to have an impact (maybe positive) on, say, social justice in Dallas, could be the "theme of the case." But for that to be possible, very likely, you will have to be pro-active in pushing for it. The reasons are many.
- The advisor may not be philanthropically inclined and may not kindle to your specific passion.
- The advisor may be managing your assets and will have a hard time finding a theme of the case that is prudent, passionate and profitable for both you and the advisor.
- Giving money to those who work with the poor does not get the advisor fed. Managing money in a foundation does. A charitable remainder trust might. A charitable lead trust may. A donor advised fund might. A direct gift will not. Selling insurance to replace gifted assets is a possibility if you want your heirs to be rich. But as you gift down your estate in your lifetime, both assets under management and the need for insurance to pay estate tax decreases.
- Hence, if the theme of the case is to give to the poor, and follow Jesus, you are a fine citizen and a less and less attractive client.
This is not a expose on my part. It is just a heads-up. Direct giving within a well considered strategic giving plan, with direct involvement on your part in managing or encouraging the specific charitable project is probably the least recommended and also the most effective charitable strategy. For tax reasons it makes most sense (ask your advisor about income tax and estate tax deductions). For reasons of personal engagement it makes most sense. It makes best sense too for involving kids in the process. And it makes most sense for the nonprofit partner. They would like to get the money sooner than later and to have your passion, engagement, and leadership along with it. And of course for the poor, or whatever cause you support, a current gift is immediately helpful. The problems of society won't wait until your estate plan kicks in at death.
So, what I am saying to you as donor, and what I am beginning to hear in conversations with the very top advisors in this area, the ones trying to break the mold, is that you the donor will have to step forward and not rely on advisors to process you through a standard system, or to propose the theme of the case. You need, having talked to peers, having canvassed your pro-social options, and considered what you want for yourself, family, and society, to come forward as a partner - better yet as a leader. The advisors work for you. They would rather have you as a client who has given away much of the money than not to have you as a client at all. Somewhere along the line, if only in fees, the advisors will get paid. But it is up to you to set direction with the quality of your life in mind, and with an eye to the magnitude of good you can do. If you want your life and legacy to be inspired, as well as prudent, you are the one who must lead.
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