Put Market Gains Toward Good Before They Completely Disappear


The markets have taken everyone on a ride this past month. Whether it’s China’s financial woes or concerns regarding an interest rate hike, this roller coaster ride is far from over.  Given the market volatility and the possibility of further market decline, advisors should consider discussing year-end charitable giving now with their clients.

Advisors are all too familiar with clients who call on December 31 at 1 p.m. to donate securities to their favorite charity.  Why not start the giving conversation with your clients now?  Advisors can talk with clients about using market gains created in recent years to make charitable gifts and clients can plan their charitable giving before further market volatility erodes those gains.

Ready to start a charitable giving conversation with your clients but not sure where to start?  Certain tax events and personal transitions in your clients’ lives offer opportunities to talk about charitable giving. Identifying these “trigger” events and the financial considerations associated with them can help you deepen your client relationships and position yourself as an important resource.

Teaching your clients how to establish a donor-advised fund (DAF) allows them to take advantage of tax benefits today.  Through a DAF, donors are able to establish a lasting gift fund from which they can involve their families, creating giving traditions that will go on for generations.

Why Choose a DAF?

Two Words:  Appreciated Assets

By transferring appreciated securities directly to a DAF, instead of selling them outright and then contributing the cash proceeds to charity, donors reap these benefits:

    • Avoid income taxation on capital gains;
    • Receive a larger income tax charitable deduction than contributing after-tax proceeds;
    • Conserve cash for other uses;
    • Preserve more dollars for charitable giving; and
    • Tax-free diversification

Download our Advisor Guide to see why a DAF is a great giving tool for your clients and the questions you can use to start the conversation.