Charitable Legacies: Steps to get started

Charitable legacies: Steps to get started

by Amy Jordan, President

Leaving a charitable legacy is often mentioned as a priority among high net-worth families. But for attorneys, CPAs, and financial advisors who serve those families, fulfilling this client priority is sometimes easier said than done. That’s because it often seems like there are so many moving parts, ranging from legal structure, advisory roles, bequests, and grant making.

Below are ideas of the best place to start:

Many families make it easier on themselves by organizing their charitable giving through a family donor-advised fund at Hudson Community Foundation (HCF). The process of organizing charitable giving itself creates much-needed clarity around the family’s philanthropic goals. This is because without an organized approach to family giving, children and grandchildren may lack understanding about their parents’ and grandparents’ processes for making decisions about which nonprofits to support. 

Consider this scenario:

“Before we got everything organized through the community foundation, our family seemed to take a scattered approach to charitable giving,” commented a donor who formed a family donor-advised fund leading up to the sale of a business. 

Establishing a fund at the community foundation can be a very effective solution for many donors who are launching a multi-generational giving strategy. Here’s why:

• Charitable vehicles at HCF are flexible and can be used to engage an extended family in the process of charitable giving. Donor-advised funds, for example, are popular because they allow the donor(s) to name children and grandchildren as successor advisors. 

• When you organize charitable giving through a donor-advised fund, you can make a large transfer of cash or marketable securities that is immediately eligible for a charitable deduction. You then can recommend gifts to favorite charities from the fund when the time is right. This is especially useful in the case of those who sell a business, receive a bonus, or for another reason experience a large influx of taxable income in a single tax year. 

• Establishing a donor-advised fund at HCF can be a much better choice for family-oriented donors than a donor-advised fund offered through a financial institution (such as Fidelity or Schwab). That’s because at a community foundation, you, as well as your children and grandchildren, receive a high level of personalized service and are part of a community of giving with opportunities to collaborate with other donors who share similar interests. 

• HCF can work with a donor and their family on a charitable giving plan that extends for multiple future generations. The experienced team at the community foundation supports strategic grant making, family philanthropy, and opportunities to gain deep knowledge about local issues and nonprofits making a difference.

• Finally, the community foundation’s tools, resources, and record-keeping make it much easier for families to communicate across generations about the family’s charitable giving purpose and goals for long-term impact.  

We welcome the opportunity to work with you and any of your philanthropic clients to establish an enduring and rewarding family philanthropy program that is customized to meet each client’s unique purpose. 

With a fund at Hudson Community Foundation (HCF), advisors can manage the charitable assets on their preferred platform at any amount. Assets stay under your management. You can provide your clients with the consistent investment advice they expect. We are your partner in charitable giving!

The team at HCF is a resource as for philanthropic clients. We understand the charitable side and are happy to serve as a secondary source as professional advisors manage the primary relationship with their clients. This blog is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.