Young adult couple talks mid adult female advisor and reaches out to shake hands with the wife.

Financial Advisors: Donor-Advised Funds for Charitable Clients

Sarah NavranProfessional Advisors

From major life transitions to the small moments in between, financial advisors can be there for every step along the way. Many clients lean on financial advisors to seek guidance in growing their wealth for personal life experiences, but also to use it to better the world around them. Among the different types of charitable investment accounts available, donor-advised funds often resonate most with individuals and families to maximize and organize philanthropy.

At Greater Horizons, we have worked with hundreds of financial advisors and their clients to help them decide if they should open a donor-advised fund. Here are five questions that may help with identifying good candidates for donor-advised funds.

  1. Are your clients already charitably inclined?

If clients already express a passion for giving back, it is clear that they deeply care about making a difference. Perhaps they share stories of their volunteer efforts, highlight their roles on various boards or donate to their favorite causes. Since they are already philanthropically engaged, a donor-advised fund could be an excellent tool. With its structure and flexibility in place, donor-advised funds enable clients to focus more on the impact of the generosity rather than the logistics.

  1. Are your clients anticipating receiving extra income they want to use for philanthropy?

This could be due to various circumstances, such as receiving an inheritance, selling a business or transitioning into retirement. In light of this, clients may want to allocate some of this newfound wealth towards philanthropy. Greater Horizons offers several easy options for contributing to a donor-advised fund, including cash, appreciated stock, and complex assets, which allows clients to consider all areas of their financial portfolio for philanthropy. Once the contribution is made, clients can make grants to their favorite charities on a timeline that works for them.

  1. Are your clients needing a large tax deduction now but would like some time to decide which charitable organizations to give to?

By contributing to a donor-advised fund, clients can benefit from an immediate charitable tax deduction. Since Greater Horizons is a 501(c)(3) public charity, clients will receive the maximum tax deductions allowed by law for their donations. Clients may also be able to avoid capital gains tax on gifts of appreciated assets. Even if clients would ordinarily take the standard deduction, now at higher levels under the Tax Cuts and Jobs Act, they can continue to support the charities they care about with the help of a donor-advised fund and a tax strategy known as bunching.

  1. Do your clients donate contributions to multiple charities and want a simpler way to stay organized?

Because we are a 501(c)(3) public charity, the only receipts clients will need to keep are from contributing to their donor-advised fund, which simplifies client’s tax preparation. With a donor-advised fund, clients can grant to any 501(c)(3) organization in good standing with the IRS. Greater Horizons does not limit where clients can request grants, and we do the due diligence to ensure clients are giving to organizations in good standing with the IRS. Plus, our online portal allows clients to access their funds and easily request grants, track the fund’s charitable activity, and access monthly fund statements right from the palm of their hands.

  1. Do your clients want to encourage the next generation to be involved in philanthropy?

Clients may have children, grandchildren or anyone in a younger generation who they hope will become inspired to make a positive impact through charitable giving as well. Connecting with clients’ loved ones now can help ensure you continue to work with future generations after a wealth transfer. By having a donor-advised fund at Greater Horizons, clients have access to our philanthropic advising services. We can complement your financial planning work by working with you to offer knowledge and expertise to client’s philanthropic decision-making. Additionally, we offer multigenerational donor education programs to help clients make the most of their giving.

If these concepts resonate with your client’s aspirations, it might be time to introduce them to donor-advised funds at Greater Horizons. Reach out to us at to learn more.

Authored by: Annie Burndrett, Business Development Advisor