April 2017 – A Review of Charitable Giving Products

Rather than simply writing a check, investors who include charitable giving in their overall financial plans can significantly increase the efficiency and impact of their generosity. The practice also offers considerable tax advantages. In this month’s Broker Monitor Report, we review charitable giving products offered to retail investors. Though philanthropy is a term often linked with particularly affluent clients, all investors have opportunities to establish long-term charitable giving strategies. Among the brokerage firms on our roster, a little more than half (53%) offer charitable giving products and services. Common methods include direct donations, trusts, charitable gift annuities, pooled income funds, private foundations and donor-advised funds. Donor-advised funds (DAFs) have emerged as a particularly popular vehicle for investors to consider. In fact, according to the National Philanthropic Trust, they are the most popular and fastest-growing charitable giving vehicle in the United States.
Over the course of our research, we found that charitable giving is still not a topic that is universally promoted by firms in our coverage group. For many investors, the concept of charitable investing can be difficult to comprehend, so it is important that firms offer adequate information and resources on the topic and on the giving options they offer. We also found that donor-advised funds are the most widely available charitable giving vehicle offered by firms in the Broker Monitor coverage group. While most firms have created their own charitable organizations through which they offer these funds, a few other firms have partnered with independent public charities to offer them.