Q & A with Myles McHale: Approaching Charitable Intention From Your Client's Perspective

What are the three most important points you would like to share with advisors regarding Cannon’s Charitable Foundation Management course?

As we gear up for Cannon’s Charitable Foundation Management (CFM) course in Nashville / Tennessee this August, I wanted to share a few key highlights to enrich your experience.

First of all, it is essential to understand that charitable contributions offer more than just tax benefits to the donor or your client. While taxes and tax breaks are indeed important, especially during tax season, the true essence of charitable giving lies in the donor’s intent to leave a lasting legacy, and support causes they are genuinely passionate about.

Advisors should encourage clients to openly discuss their main interests and passions, while highlighting that philanthropy is not just for the ultra-wealthy.

A donor-advised fund (DAF) can be started with a minimum of just $1000, making it accessible for many. By the way, this is a great way to get children and grandchildren involved in the family’s philanthropic message.

Finally, from a competitive standpoint, our program focuses on clearly Identifying charitable planning opportunities and helps advisors craft actionable next steps to initiate conversations. I am glad to say that at Cannon, we help advisors pinpoint and address specific client needs, differentiate their firm from the competition, and grow their business.

In terms of current trends and newsworthy updates, one might assume that economic uncertainty would deter some clients from charitable giving. Is that the case? 

There is solid evidence that charitable giving remains steady regardless of economic conditions. This underscores the importance of incorporating charitable giving and philanthropic planning into your advisory practice. Studies show that a significant 85% of clients want their advisors to support them in their legacy and charitable giving, yet less than 30% of advisors proactively address this topic with top-tier clients. [1] In other words, there is a clear gap that needs to be filled and every financial professional should be aware of it.

Here is the question for advisors: Which side of this equation would you prefer to be on?

As the coordinator of Cannon’s Charitable Foundation and Endowment Management sector, I have been a fervent advocate of philanthropy and charitable giving for over 40 years. Integrating charitable planning into client conversations not only enhances your position as a comprehensive financial expert but also helps strengthen and retain client relationships across generations. It allows you to connect with clients on a more personal level, moving beyond the jargon of financial terms to deliver truly holistic wealth management.

When it comes to establishing charitable trusts, how do people ensure their charity serves as a not-for-profit organization and qualifies for tax exempt status? Any important specifics that can be inadvertently overlooked?

It is crucial to have dedicated experts who understand both the 'what' and the 'how' of charitable giving. That is where YOU the advisor and YOUR FIRM’S resources come in.

Keep in mind that strategic giving plans are essential for maximizing charitable impact. It is incumbent upon financial professionals to educate clients on various donation types, explain how to establish trusts or endowments, and integrate charitable giving into broader financial strategies.

Compliance and risk management are equally important, ensuring that clients' generosity is directed to bona fide organizations that make a significant impact.

Sadly, there is no shortage of ‘’fraud charities’’ actively soliciting funds from donors. In fact, there are just as many fraudulent organizations out there as there are legitimate not-for-profit community champions addressing issues throughout our nation.

Donors and advisors can use services like GuideStar to make sure the money goes to the cause and organization that they are trying to fund and support. For more information, please visit: https://www.guidestar.org/

[1] 2022 U.S. Trust Study of High-Net-Worth Philanthropy” conducted in partnership with the Indiana University Lilly Family School of Philanthropy