Year-end client reviews are in full swing, and for many advisors, it is the moment philanthropy takes center stage. A recent study by The Philanthropic Initiative (TPI), co-sponsored by Foundation Source, found that 90 percent of advisors now make it a practice to discuss philanthropy with their high-net-worth clients, up from 80 percent in 2018, with 97 percent of clients agreeing it’s an important part of the advisor/client relationship.
Still, fewer than half of advisors raise the topic of philanthropy with most of their clients. The end of the year, when you’re already revisiting a client’s full financial picture, is a natural opportunity to expand the support you offer clients and deepen your relationship.
For clients ready to give, a donor-advised fund (DAF) makes purposeful, tax-smart giving simple. A DAF lets clients set aside charitable dollars when it’s most tax-advantaged, even before they’ve decided which charities to support, contribute appreciated assets to mitigate capital gains taxes, and invest the funds to grow tax-free while they decide how to give.
For Clients Without a DAF: Is This the Year to Introduce One?
A DAF can support intentional giving at any level. The vehicle itself doesn’t require a particular net worth or giving history to be beneficial. Here are indicators a DAF conversation may be especially timely for your clients:
- A liquidity event: Clients selling a business, exercising equity, or realizing a large capital gain this year have an immediate opportunity to mitigate capital gains taxes by contributing appreciated assets directly to a DAF.
- Appreciated holdings: Clients reviewing portfolios before year-end may be sitting on long-held stock or securities well suited for a charitable contribution, allowing them to mitigate capital gains taxes while supporting the causes they care about.
- Streamline giving: Clients who support the same few charities every year can give through a DAF, putting all of their giving in one place, on one tax receipt.
- Family conversations about giving: Clients beginning to involve children or grandchildren in wealth planning may welcome a vehicle that makes shared giving, and a shared legacy, easier to build.
For Clients Who Already Have a DAF: Are They Getting the Most Out of It?
For clients who already have a DAF, year-end is a chance to leverage the fund for purposeful giving in 2026. Here are a few questions worth asking:
- Does activity in the DAF reflect the client’s annual giving goals? A DAF works best when contributions and grants are directed toward charitable impact in alignment with your client’s goals for giving.
- Could year-end gifts be streamlined through the DAF? If a client gives annually to specific charities, routing those gifts through a DAF means one giving receipt vs. managing multiple.
- Are there causes your client has mentioned but hasn’t yet supported? A DAF makes it easy to recommend grants to charities before December 31st, providing the support they are counting on during a critical time of year.
- Would transferring an existing DAF serve your client better? Donors sometimes move funds to a new DAF provider for a stronger tech-enabled experience, lower fees, or because they need more responsive support.
Discuss Opening a DAF with Your Client Today
Clients are often motivated by the impact their giving makes and how it feels to give, making this time of year the perfect opportunity to support your clients’ strategy for their generosity. Whether a client is opening a DAF for the first time or is looking for ways to better leverage their charitable fund to support causes they care about, this conversation is worth having before the calendar turns.
Learn more about opening a DAF today.
Schedule a call with us at 800-839-0054 or click here.
This is for educational purposes and should not be construed as legal, tax, or investment advice. Advisors should work with clients’ CPAs and attorneys to implement strategies.
