Advisors increase assets under management as some of the business is sold inside a DAF and some outside.
- Advisors sell life insurance to replace gifted assets.
- Tax and legal mavens do consulting and documentation.
- Valuation firms and business exit strategists do well.
- National gift funds increase assets under management, and so do alert community foundatioss who can compete in this market.
- Local nonprofits who cannot accept closely held C-corp interests, commercial real estate, or S-Corps - who find this whole topic daunting, can and should benefit as funds leave the DAF headed back home to the local community where the business owner lives and leads.
Who loses? And how to find your role in making this work
Local charities lose if they wait around hoping for a grant from a DAF. You have to be in the game pre-exit, if you hope to be in the game post-exit. Your role now is to identify possible prospects for this and convene advisors.
- Advisors lose if they wait around to hear about this a year from now, after the donor has exited, and has the money all locked up in a fund the advisor cannot manage. Your role today is to learn more, talk to your clients and prospects, and network with local nonprofits who are in dire need of your expertise.
- Attorneys lose if they fail to see that, given where the estate tax thresholds are today, the legacy game has changed from saving estate tax and maximizing net to heirs, to creating a successful and thriving life in which the business family does wonderful things for not only themselves, but also for the community. That is the new legacy planning. If you call that "soft," your own head is getting soft. This is among the most technical and multi-dimensional planning there is. Estate planning, business exit planning, retirement planning, investment planning, family dynamics planning, and planning for social impact. The rest of us, those of us who are not JDs, need you in this conversation. We cannot do it without you.
I am speaking on this topic often to Partnership for Philanthropic Planning Councils, advisor associations, and national networks. For once, making good money and doing the right thing for our business owning families, and their communities, are well-aligned. A leader in all this is Bryan Clontz, CLU, CFP, AEP, CAP. I have been working with him, as well as Tim Belber, JD, and Dr. Steven Meyers, VP of The Center for Personalized Philanthropy at The American Committee for The Weizmann Institution of Science, to evolve the ideas, the teaching, and the practice. Here is a link to videos from Bryan to give you a taste.