Discussing Philanthropy: Do Advisors Wait Too Long to Talk About Charitable Giving?

Many financial advisors hesitate to bring up charitable giving with clients. So what happens when they delay this conversation? They may miss out on a valuable opportunity to help clients align their wealth with their values. By the way, some advisors assume that clients donate to charities mainly for tax purposes – which is not always the case. It’s understandable that estate planners want to wait for the “right” moment, however, starting this very important conversation earlier can benefit BOTH the client and the advisor.

Here’s why you shouldn’t wait and how to approach it in a way that feels natural, comfortable and respectful.

Why Do Advisors Hesitate?

Evidence shows that advisors usually wait for a big financial event before initiating a discussion about charity (The Columbus Foundation). This event could be a year-end tax planning, a sale of a business or when a client specifically asks about charity. On the surface, this seems logical. But in reality, waiting can create unintended consequences. Clients may be missing out on tax-saving opportunities or the chance to plan their giving earlier. And what happens when it finally happens? The conversation could feel rushed, forced or disorganized. In this case, the disappointment may be inevitable.

Most advisors hesitate not because they don’t know what to say or how to handle the situation, but because they’re worried about the timing or how it might affect the relationship (Merrill Lynch). They fear the conversation may turn uncomfortable or awkward, or that they’ll say the wrong thing. These concerns are completely understandable, but they’re also a sign of how much advisors care about their clients. The good news is, you don’t need to wait for the “perfect” moment. You can start the conversation NOW with the knowledge and tools you already have.

According to Merrill Lynch, clients feel happier when they are giving back. Another great reason to get the ball rolling sooner!

The Benefits of Early Charitable Giving Conversations

Charitable giving isn’t just good for the community -- it can also be good for the giver. Research shows that donating to charity can boost mood, reduce stress and even lower blood pressure. Isn’t it amazing? According to the Wall Street Journal, giving “triggers the release of serotonin and dopamine, hormones linked to happiness, while reducing cortisol, the stress hormone.” So not only is charitable giving good for your clients’ wealth planning, but it can also improve their well-being.

Starting this conversation earlier also gives your clients more time to consider their options and choose a giving strategy based on their most important values. Whether they’re interested in setting up a donor-advised fund or planning a bequest, you can help them build a plan that leaves a lasting legacy. And experiencing a sense of personal fulfillment is an extra bonus for BOTH of you. This is a conversation that can have a deep, emotional impact and result in stronger relationships and a sense of purpose.

Advisors Miss the Mark

Despite the clear benefits, many advisors aren’t effectively bringing up charitable giving. A 2018 study by U.S. Trust found that 71% of advisors raise the topic from a technical perspective. Here is what it means. They usually focus on numbers, tax breaks and financial benefits rather than talking about the client’s goals or passions. Yes, tax benefits are important. So are other financial benefits. But focusing solely on these can miss the emotional and personal side of charitable giving.

By the way, the same study revealed that 46% of advisors think clients give primarily to reduce taxes, but only 16% of clients agree. In fact, just 5% would reduce their charitable giving if the estate tax were eliminated, and 42% would give less if income tax deductions for donations were taken away.

That’s why estate planners should come up with specific questions about what’s important to the client and how they want to make a difference. Ask them about what causes they truly care about, instead of jumping straight into the technical details. Let them know that you are ready to discuss philanthropy. And don’t forget to present a few different options to make them feel empowered. Most importantly, make sure you explain to them that charitable giving has certain emotional and health benefits, can relieve stress and lift them up –- just like the people your clients will try to lift up.

Final Thoughts

Charitable giving is a crucial part of any financial plan. It’s never too early to start the conversation. By addressing philanthropy sooner, you help clients align their wealth with their values and create a more fulfilling and well-integrated financial plan. Plus, you’ll be able to improve the relationship by showing your clients that you care about more than just their money -- you care about their legacy.  

Frequently Asked Questions

1.Why do many financial advisors hesitate to discuss charitable giving?
Advisors often wait because they’re concerned about the timing or how the conversation might affect the relationship. Sometimes they may not be fully prepared to handle philanthropy. They also worry that focusing on giving might feel awkward or forced.

2.What are the emotional benefits of charitable giving for clients?
Research shows that donating to charity can improve mood, reduce stress, and even lower blood pressure. Giving activates "feel-good" hormones like serotonin and dopamine while reducing cortisol, the stress hormone.

3.How can advisors start the conversation about philanthropy with clients?
Advisors should begin by asking about the client’s values and the causes they care about, rather than jumping straight into technical details. Presenting different charitable giving options and explaining the emotional and health benefits can make the conversation more meaningful.