Wealth management teams help in charitable giving

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The year of 2013 was momentous for charitable giving. With growth at nearly 5 percent, last year represented the largest year-over-year increase in giving since the Great Recession.

Wealth advisors have been taking an increasingly active role in providing research to their clients when it comes to finding the right philanthropic organizations they can support. And with so many worthy nonprofits to contribute to locally, nationally and internationally, a clear assessment of how those charitable donations will be used is an essential element in making the right match for a donor.

When clients approach their wealth advisor seeking more information, they may simply provide the name of a specific nonprofit or a short list of key causes they are passionate about. This can span from animal welfare, to research benefiting a disease, or a community project already in development.

Wherever the starting point begins, a wealth advisor can serve as a resource to outline the key areas of focus to ensure a donor is not only passionate in their support, but also well informed. At the very least, the donor should have a clear assessment of three areas: transparency, communication and outcomes.

• Transparency: When it comes to vetting an organization, gather as much published information as possible. A visit to the website ought to easily point to values, mission, board members and more. A check with the Better Business Bureau (BBB) should also be a first stop, as they have a voluntary program called the BBB Wise Giving Alliance that verifies certain charities are upholding the BBB “Standards for Charity Accountability.”

For an organization to comply with these standards, they are measured in how they govern their organization, the ways they spend their money, in the truthfulness of their representations, and in their willingness to disclose basic information to the public. In addition to the BBB, several websites exist in keeping nonprofits honest and should be referenced in initial research.

At the donor’s request, a wealth advisor may also coordinate a site visit and meeting with the organization’s board or leadership team. This is an excellent way to get to know an organization personally, fostering a broader discussion about the goals and mission at hand for the near- and long-term future of the charity.

• Communication: Many times, satisfaction is measured in the communication approach between nonprofit and donor. Is the organization invested in building a relationship with the donor? Is the nonprofit acknowledging gifts in an appropriate manner for the contribution?

For example, some donors prefer to have more personalized communication as opposed to an informal letter, or email, while others wish to be left anonymous. In either instance, the wealth advisor can gather a firm understanding of what the donors can expect in terms of communication style and frequency when they begin making their investment.

• Outcomes: Perhaps the most common concern with philanthropic giving is whether or not the funds are being used effectively and succeeding in the organization’s mission.

Measuring the impact of the gift can be done from a number of avenues. Websites such as Charity Navigator and Guidestar offer a breakdown of the percentage of the budget spent on the programs and services delivered, administrative expenses, fundraising programs, CEO salaries and more.

A regular line of communication with donors regarding updates on key projects, goals attained or progress reports throughout, should provide key indicators of strong leadership at the nonprofit.

Wealth advisors have traditionally offered guidance on the tools available to make charitable contributions, tax advantages associated with these gifts and the proper way to fold long-term giving into an estate plan. While these functions always remain vital, a wealth management team is also able to assist in pinpointing the “why” behind giving, and assist in the necessary research to match donors with an organization that nourishes that passion and ensures that the partnership continues to be beneficial for all.

Shelly Parker Arnold is vice president and private banking client manager for UMB Private Wealth Management in Colorado Springs. She can be reached at shelly.parkerarnold@umb.com.