Sustaining Your Family’s Philanthropic Legacy

Posted on October 26, 2017

Donor-Advised Funds as a charitable solution for high-net-worth families

We all hold a special place in our hearts for the charities and other non-profit organizations that are dedicated to serving our community and our country. In gratitude for their admirable initiatives, many of us feel compelled to support these community organizations by donating our time, talents or financial support. However you choose to pledge your support, charitable action is a truly rewarding means of expressing our altruism and impacting meaningful, positive change.

As someone who has had the privilege of working alongside many successful families in the Naples community, I have always been impressed by our clients’ selfless philanthropic efforts. Above all, I have been inspired by their eagerness to engage the entire family in the charitable giving process. By unifying their family members behind a common goal, these clients have not only instilled the virtue of philanthropy within their children and grandchildren; they have also established a powerful legacy that extends well beyond their lifetime.

Specifically, we have found that Donor-Advised Funds (DAFs) are a phenomenal vehicle for channeling your goodwill as a family unit, while also minimizing your tax burden and preserving your wealth.

A Donor-Advised Fund serves as a conduit between your family and the charitable organizations you wish to support. Once you’ve established a fund, the family donors associated with your DAF have the flexibility to contribute as you see fit; thus, the DAF provides you with considerably more freedom in comparison to a private family foundation. In many cases, the contributions to your DAF are entirely tax-deductible. Then, your family members (or other successor advisors) are responsible for directing the funds towards the organizations that best align with your values and passions.

How do I involve my family members in a DAF?

In my experience, the long-term effectiveness of a Donor-Advised Fund is greatly enhanced by the family’s willingness to unite behind a common philanthropic mission. Family unity can best be achieved through open discussion about finances between family members. The question is: How do you go about initiating this conversation and ensuring ongoing communication about your DAF?

First, a family meeting is a time-tested method for facilitating the free flow of ideas and bridging the communication gap between family members. The key is openness: ask each person about their charitable passions, their history of donating time and money, and their most important priority in terms of giving. As the founder of the fund, you should share your wisdom and insight about philanthropy, and express your eagerness to engage each member in the decision-making process for the DAF. In addition, several of our client families have benefited from hiring an objective third-party facilitator, who can drive a meaningful conversation, alleviate emotional tension and address the most pressing areas of discussion.

Perhaps the greatest accomplishment that can be gleaned from a family meeting is the development of a family mission statement: a concise summary of your collective goals and wishes. Your mission statement will provide you with a set of well-defined criteria for selecting charities that are congruent with your family’s values and passions. In doing so, you can be confident that your philanthropic endeavors will impact change that is meaningful and fulfilling for the entire family.

Secondly, utilizing a website or closed social media group for your DAF can be an effective way to (1) articulate formal grant-making procedures and (2) promote continuous communication between family members. Using technology in this capacity could encourage younger family members to become more engaged in the DAF – inspiring the next generation to research new charities that are close to their heart and to support your family DAF for years to come.

Your Donor-Advised Fund serves as a tangible representation of your philanthropic vision and deeply held values. Your children, grandchildren and future posterity will always appreciate the charitable giving mechanism you have established – and with consistent communication, they can sustain your family mission and values into perpetuity.

Kim Ciccarelli Kantor, CFP®, CAP™, is the president and co-founder of Ciccarelli Advisory Services Inc., a family-focused wealth management firm. Kim has been serving clients in our Naples community for more than 33 years, with an emphasis on developing powerful, multi-generational bonds between CAS and the families they serve.

To discover more about Donor-Advised Funds, visit the CAS website at CASMoneyMatters.com or contact their office at 239-262-6577.

Investment advisory services offered through Ciccarelli Advisory Services, Inc., a registered investment adviser independent of FSC Securities Corporation.  Securities and additional investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment adviser. 9601 Tamiami Trl N, Naples, FL 34108.