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Why Talking to Your Clients About Donor Advised Funds Is Good for Business

Over the past 20 years, donor advised funds (DAFs) have become one of America’s preferred tools for charitable giving. They are vital to helping donors achieve their charitable goals, and have grown in popularity due to the recent tax rule changes in the Tax Cuts and Jobs Act of 2017.

To help you better serve your clients, we spoke with philanthropic expert Dana Holt, JD AEP CAP, owner, HOLT Consulting, LLC and strategic consultant for the Saint Paul & Minnesota Foundation, on how a DAF can enhance your clients’ charitable giving goals and how working with your clients on DAFs can also benefit you.

Do you know why your client gives?

Before talking about DAFs with your clients, get comfortable talking about charitable planning and the benefits of giving.

According to the 2018 US Trust Study, fewer than half of donors feel they are having robust conversations that align their wealth with important goals and values.

“When it comes to philanthropic planning we're really talking about what outcomes do they want to see and what changes they want to affect,” Dana said.

Dana recommends asking your clients starter questions about what giving means to them. These questions can include but aren’t limited to:

  • What’s your first memory of giving?
  • Who’s the most generous person you know and why?
  • How did your parents/grandparents practice generosity?

Once you have established what drives your client to give, you can begin exploring if a DAF is the right giving vehicle for them. Besides providing your clients with a flexible and efficient way to organize their charitable giving, DAFs can offer you benefits too.

According to the same US Trust Study, DAFs can help you with the following three things:

  1. Better referrals
  2. Deeper relationships with your clients
  3. A link to the next generation

Better Referrals

Providing your clients with charitable tools, like DAFs, that match their giving goals creates strong, trusting relations with your clients ― something paramount to strengthening your business. By providing that level of service, your clients may in turn make referrals to your firm as a form of compliment that will continue to drive your business.

“When your clients go out for coffee on Wednesday morning, do you think that one of them says to the other, ‘Hey, let me tell you about this great new life insurance policy I bought?’” Dana said. “Probably not, but one of the things that they will bring up is, ‘Have you heard of a donor advised fund?’ and that brings up referrals.”

Deeper Client Relationships

Building a deeper relationship with your clients is important because it helps create client loyalty. When you talk to your clients about their charitable goals, and not just their finances, you are able to build trust and get to the core of why they give.

“It just brings them more satisfaction on both the client side and the advisor side,” said Dana.

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