Encourage Clients to Open DAF Accounts Before It’s Too Late
Though advisors have opened numerous donor-advised fund (DAF) accounts for clients in the past 10 years, some of these same advisors are frustrated that others haven’t yet opened accounts even though these would be in their best interests.
Last week, an advisor asked me for advice so he could convince some of his charitably-minded clients to open DAFs because they have been reluctant in the past. Most advisors, as well as some of their clients, understand the benefits of DAFs: maximum tax deduction now and ability to grant over time; ease of making grants online; anonymity when desired; ability to accept illiquid assets; low fees; assets grow tax-free; only one annual tax receipt.
While some clients open DAFs the first time they learn about them, often others don’t open them until their advisors recommend them a second or third time. At this point, most high-net-worth donors have friends, family members or colleagues who have opened accounts. Though it’s getting very late in the year and cutoffs for opening accounts and donating stock and other assets are looming, advisors should be encouraged that there’s still time to try again.
Twelve Questions
Here are some questions that have been helpful for advisors to ask clients in an effort to stimulate their interest and encourage them to do what they should have done years ago:
Peak Season
Some clients may not be ready to open a DAF or change what they’ve been doing for years, but now’s a perfect time to ask these questions because this is the peak charitable giving season and everyone receives numerous donation requests at this time of year. Most clients continue to be philanthropic and would be pleased to know of ways that they can have a greater impact on the causes and charities that are most important to them.
Should they not be ready to open a DAF this year, charities still need and would appreciate their direct support before year-end. By broaching the subject now, clients will be more likely to open a DAF earlier next year and avoid the same situation at the end of next year.
Ken Nopar is the vice president and senior philanthropic advisor for the American Endowment Foundation (AEF) donor-advised fund.
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Originally posted on: https://www.wealthmanagement.com/philanthropy/encourage-clients-open-daf-accounts-it-s-too-late