by Ellen Smith Israelson
Among the many concerns that clients express when there is a decline in the markets and increasing inflation, is their ability to continue supporting their favorite charities. If your clients have already established JCF accounts or other donor advised funds, they are in a good position to continue their charitable giving uninterrupted. These folks had the benefit of advisors who encouraged them to set aside assets when the economy was better. They do not need to rely on their 2022 annual income or savings, nor do they need to sell stocks at a time that is not advantageous. The mantra of many advisors—“Don’t delay your planning!”—applies to charitable assets as well as the client’s overall wealth.
However, even those clients who did not plan ahead can still benefit from their advisors’ recommendations as to the most tax-advantaged assets to contribute, especially those clients who may hold low-basis stocks or other non-correlated assets. It’s never too late to establish a
donor advised fund. Even in this economy, using a DAF is perfect for clients who:
- are engaged in philanthropy and support more than a few charities
- need help organizing and tracking their gifts to charities
- are winding down or terminating a private foundation
- have a lead trust and want an easy, more efficient way to send money to their charities
- have illiquid assets such as privately held stock, real estate, and limited partnership interests that most charities cannot accept
- may retire soon and want a larger tax deduction in the current year, while setting aside money for charitable distribution over years to come when they are not working
In any economy, a JCF fund has many advantages including the ability to reduce the record-keeping burden and be more efficient, take a tax deduction in the current year and make grants to charities
over time, and react quickly during crises. In addition to helping clients with lifetime giving, some DAFs including JCF do not limit succession on DAFs, so it is a wonderful way to pass on a charitable
legacy. If you need assistance or tools for having the charitable conversation with your clients, please visit JCF’s Resource page (https://jcfny.org/resources), or contact Ellen Israelson, Vice President of Philanthropic Services at [email protected].