Big questions: Why your clients are asking about philanthropy tools

According to the most recent U.S. Trust Study of High Net Worth Philanthropy conducted in partnership with the Indiana University Lilly Family School Philanthropy, 98% of high-net worth clients are giving to favorite charities each year. And they want help from their attorneys, accountants, and financial advisors!  

Unfortunately, only 14% of advisors actually offer to help their clients with charitable planning, and only 20% of advisors target younger family members. This is part of the reason next-generation loyalty to advisors is so low.

Philanthropy is a natural connector across generations. When you work with your clients on their charitable goals, it's very natural and appropriate to involve children and grandchildren. Philanthropic planning allows advisors to build next-generation relationships with clients' heirs while the clients are still alive and well. 

So what do your clients want to know? 

1. Clients want to be informed. Sure, they want to make their own choices about where to give. But they expect that their advisors will partner with knowledgeable experts, such as professionals at a community foundation, to help guide them in how to carry out their wishes within the Internal Revenue Service's guidelines.

2. Clients want to know what options are available to them if they want to give closely-held stock, real estate, or other hard-to-value assets. They also want to work with people who are watching the latest news out of Washington about tax law changes that might impact giving.

3. Clients expect their advisors to be able to get in touch with people who are up-to-date on the most critical needs of the community, even if the clients choose to support different causes. 

Fortunately, your Community Foundation is here to help! Our team can answer these three questions, and much, much more. For savvy advisors who work with a community foundation, the answers are just a phone call away.  

IDEAS FOR USING THIS ARTICLE

If you're not already using the "What is a Community Foundation" video, now would be a good time to start. It's a great way to educate advisors!

Doing good and feeling great: Keeping up with the clients' mindset

If you have any doubt that your clients are walking in your door with social impact on their minds, just take a look around! Doing good is everywhere! It's critical that you're aware of this trend so you can maximize social impact as an emotional hook to build client loyalty and next generation retention.

To test your social impact savvy, try this pop quiz. 

Massage Envy, Macy’s, Best Buy, Vans, Staples, Bank of America, Ameriprise, Zappos, H&M, Samsung, Sprint, GameStop, Old Navy, and Humana. What do these companies have in common?

Here’s a hint: The answer is related to these charities: Arthritis Foundation, Clothes4Souls, Americans for the Arts, DonorsChoose.org, Special Olympics, Feeding America, Best Friends Animal Society, DoSomething.org, Autism Speaks, and Boys & Girls Clubs of America.

If you guessed that these companies are the winners of the 2016 Halo Awards and the charities listed are the causes the companies supported, you are correct! (Your social impact IQ is off the charts, by the way.)

The Cause Marketing Halo Awards are North American cause marketing’s highest honor. The awards are bestowed by the Cause Marketing Forum, Inc., a group founded in 2002 to increase successful company cause alliances.

You know a lot about cause marketing whether you realize it or not. That’s because the idea has steadily become a powerful consumer dynamic ever since brands began aligning themselves with charities to benefit not only the brand but also society as a whole. Early cause marketing efforts included the Marriott’s campaign with the March of Dimes in 1976, which was coordinated around the opening of a new hotel in San Diego, according to the Cause Marketing Forum. In 1979, Famous Amos Cookies launched a campaign with Literacy Volunteers of America, featuring Wally Amos as the spokesperson for increasing literacy rates across the country.

Since then, the techniques known as “cause-related marketing” and “cause marketing” continue to grow in popularity. The Cause Marketing Forum estimates that cause sponsorship will reach $2 billion in 2016, a 3.7 percent increase from 2015. In addition, 80 percent of global consumers agree that business must play a role in addressing societal issues.

Now you're caught up on cause marketing!

The point is, you can count on the Community Foundation to know what's going on. Staying current on social impact trends is our responsibility at the Community Foundation. We'll make sure you're informed about timely topics such as cause marketing, charitable giving, community needs, volunteering, and other topics of interest to your socially-conscious clients.


 

IDEAS FOR USING THIS ARTICLE

Along with this article, consider offering links to credible third-party sources to reinforce your knowledge of the social impact culture mindset that has defined the contemporary approach to philanthropy. For example:

  1. Blog posts, like this one, describing the ESG (environmental, social, and governance) investing trend which involves nearly $23 trillion of the world's professionally managed assets.
  2. This video from our gallery on the topic of "doing well by doing good." 

Social media + community impact = social impact: Why the next generation and philanthropy go together

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As an attorney, accountant, or financial advisor, you are no doubt very skilled at getting inside your clients' heads. Understanding your clients' goals and motivations is critical to creating financial, estate, and charitable giving plans.

But have you ever wondered what's going on inside the hearts and minds of the community-conscious, socially-connected next generation? These are the people who are your future clients, whether they are children and grandchildren of your current clients or new clients whom you've not yet met. That's the mindset you want to understand.   

To start thinking like the next generation, consider the magnitude of social consciousness. It's on the upswing! Hundreds of research studies and white papers collected by the Social Impact Benchmark show us numbers like these:  

  • 79% of consumers said they would likely switch brands based on associations with a good cause, when price and quality are equal

  • 85% of Americans say that they have a more positive image of a product or company when it supports a cause they care about

  • 85% of consumers say it is positive for companies to involve causes in their marketing

  • 84% of employees state that selecting their own cause is an important factor in determining their support of a company’s cause efforts, and 94% of millennials want to use their talents for doing good.

  • 79% of employees feel it is important that their employers provide matching gifts, 76% want paid time off to volunteer, and 74% of employees expect company-sponsored volunteer days

  • 56% of millennials say they would likely refuse to work for a company that is not socially responsible

  • MBA graduates would forgo $13,700 in salary to be part of a company that is socially responsible

There is perhaps no better example of the shifting philanthropic mindset than the rapid rise in popularity of the donor-advised fund. According to a report issued in 2016 by the National Philanthropic Trust, contributions to donor-advised funds hit an all-time high of $22.6 billion in 2015. This represents a record-setting 8.4% of total giving in America. Assets held in donor-advised funds now tops $78 billion, which is more than double the 2011 level of total assets which was just over $38 billion. The total number of donor-advised funds in 2015 was 269,180, up 11% from the year before. By comparison, the 81,802 private foundations in the U.S. grew at only 3% year-over-year. Donor-advised funds are quickly becoming the charitable planning tool of choice, showing us that people enjoy getting involved with their own giving and pursuing philanthropy, by doing it their way. 

Your Community Foundation knows philanthropy will grow if your clients feel better about their experiences with doing good. When we work together, all boats will rise in our social impact culture! Good things will happen, whether you are an executive who aspires to improve employee engagement and employer brand, a financial advisor building a business through philanthropy tools, an attorney building a practice focused on the next generation, or a nonprofit leader who is committed to raise funds to sustain a mission.

The team at the Community Foundation looks forward to working with you to serve the next generation of your clients and community philanthropists!