Bring more value to your clients with charitable planning

The role of the CPA is evolving. Clients are increasingly looking for a “onestop shop” where they can receive all of their financial and tax services from one firm or individual. Because of this shift in consumer sentiment, many CPAs are looking for ways to expand their service offerings and increase both their competencies and the amount of trust they engender. Charitable planning is one such opportunity.

As research indicates, charity is a concern of many clients and potential clients. In its 2016 Charitable Giving Statistics, the National Philanthropic Trust noted that approximately 91% of highnetworth households give to charity. In 2016, giving by individuals and families reached an alltime high of $389.05 billion.

What’s more, many clients, especially highnetworth clients, expect their advisers to discuss charitable planning with them. Fully onethird of highnetworth individuals surveyed in the 2017 U.S. Trust Study of the Philanthropic Conversation said that the topic should be raised during their very first meeting with an adviser, and 90% stated that the discussion should occur within the first several meetings.

However, CPAs may be missing out on an opportunity to provide the charitable planning advice clients need. The 2016 U.S. Trust Study of High Net Worth Philanthropy found that in 2015, only 24% of highnetworth individuals had discussed charitable giving with an adviser — and, of that 24%, only 11% said they had spoken with an accountant.

With automation on the rise, the human side of advising is taking on increased importance. Many CPAs are looking to differentiate their firms by offering their clients services they can’t get from software. Charitable planning can be one part of such a strategy.

When done right, charitable planning goes far beyond discussing the amount a client should give to maximize his or her tax deductions. It involves conversations that evoke your clients’ most deeply held values. This type of discourse enhances your role as a trusted adviser. In fact, the 2017 U.S. Trust Study of the Philanthropic Conversation states that threequarters of advisers find discussing philanthropy with clients to be an excellent way to deepen and establish new relationships. This can benefit your practice as well: Clients who have strong relationships with their advisers are more likely to stay loyal to them, as well as refer them to friends, family, and business connections.

Clients want to talk about giving and will seek out advisers who are willing to assist them in strategically thinking through their charitable planning goals. Many will naturally turn to their CPA for this kind of advice.

CPAs are wellpositioned to help clients achieve their charitable giving goals because they possess both technical expertise and a deep knowledge of their clients’ financial situations. The CPA is equipped to understand both the tax benefits of giving as well as how charitable strategies can be interwoven with the other important areas of the client’s financial picture, ensuring a client’s charitable giving is in line with his or her other financial goals.

Charitable planning can be a rewarding experience for both the client and the CPA. Encouraging a client to discover, explore, and act on opportunities to help his or her community, country, or world is assisting the client in the stewardship of his or her financial resources. This type of conversation with a client is profound, and the opportunity has never been greater or needed more.

CPAs have many opportunities to begin the discussion about charitable planning with a client. Discussions of topics that CPAs already have with their clients, such as about budgets, yearend tax planning, estate planning, retirement, the sale of a farm or closely held business, or the sale or disposition of highly appreciated stock, can all naturally lead to a conversation on giving (see the sidebar, “Opening the Charitable Planning Conversation”).

As one example, say a client asks you about her budget or spending plan. You could open the discussion by reviewing her income tax return and determining what percentage of her budget is directed to giving. If the client is indeed giving, you can then thank her and ask her about the charities she contributes to during the course of the year. You may even wish to share a story about your giving and your favorite charity. Then, you can ask her if she has goals for giving and, if not, mention your willingness to help her with her goals for charitable planning.

A word of caution: Though tax deductions will naturally form part of a conversation on charitable giving, they should not be the sole topic of discussion. Frame any current or future income tax benefits as the result of giving, not the reason for giving. Research shows that clients’ giving is motivated less by tax breaks than by a desire to give back. In the 2017 U.S. Trust Study of the Philanthropic Conversation, only 10% of highnetworth individuals stated that they give to charity to reduce their taxes. They were far more likely to donate money for reasons such as encouraging the next generation to be charitable (30%), religious or spiritual motivation (23%), and a sense of obligation due to their wealth (22%).

Charitable giving, when motivated by donative intent, brings a deep sense of satisfaction to the client. However, CPAs will not know if their clients have this donative intent unless they are willing to engage in meaningful charitable planning conversations.

Clients, particularly highnetworth clients, are looking to their advisers to help them fulfill their philanthropic mission, involve the next generation in giving back, and leave a legacy. Clients are also seeking a deeper level of valuebased discussions about charitable giving — conversations that go beyond tax considerations and include life goals, values, and passions. Few advisers are better positioned to have these types of conversations than CPAs. Furthermore, what could be more rewarding for a CPA, whose career is about helping clients become better stewards of their resources, than seeing clients changing the world for the better?

Other opportunities to begin a discussion of charitable giving with your clients include:

About the author

Susan M. Tillery ( is president and CEO of financial planning firm Paraklete Financial Inc.

To comment on this article or to suggest an idea for another article, contact Courtney Vien, senior editor, at or 919-402-4125.

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