Eighty-seven percent of financial advisers expect income taxes to increase for most of their clients in the next 12 to 18 months, with 26 percent predicting their clients will increase charitable giving to offset the tax hikes, according to the 2010 Fidelity Charitable Gift Fund Advice & Giving survey of 500 financial advisers.
Forty-eight percent of advisers “expect their clients to maintain their level of giving, despite continuing market uncertainty and an overall decline in U.S. charitable giving in 2009,” according to the Fidelity report.
When advisers were asked which “giving vehicle” they expect to see increase in use over the next five years, nearly twice the number of advisers said donor-advised funds (39 percent) as said private foundations (20 percent), the report said. Donor-advised funds allow donors to set aside cash or other assets, receive a tax break, and later decide how much to recommend giving to specific charities.
Only half (52 percent) of financial advisers “proactively offer charitable-planning advice, although 63 percent believe clients would be interested in it,” the report said.
One of the primary reasons advisers do not offer charitable planning advice is because they see philanthropy as a client’s personal decision (44 percent), the report said. “Other reasons advisers cited are that clients have not requested help in that area (52 percent) and they do not feel qualified or knowledgeable enough on the topic (31 percent),” said the report.
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Comments
1. nonprofitesq - July 21, 2010 at 03:12 pm
The headline for this story seems a bit of a stretch: It suggests that "Advisors to the Wealthy" generally predict a rise in giving to offset new taxes. 1 in 4 of the advisors responding to the survey predicted that result--not exactly overall agreement on the premise set forth in the headline. This is an important nuance because there is little agreement on the issue of whether donors give to avoid taxes, or because they believe in the mission of the organizations which they support. The best evidence in this context is the Canadian experience which teaches that charitable giving increased when capital gains taxes were eliminated.
2. shybear309 - July 21, 2010 at 05:04 pm
I agree with the previous comment. It is perhaps the perception or strategy of advisors to increase charitable giving to offset taxes. An interesting question is whether we in the nonprofit world want that to be a motivation for giving. That's simply using philanthropy as a means to another end, not the fulfillment of the organization's mission.