Uncovering your clients’ charitable intent boils down to the questions you ask. Wealth Advisor Michael Smith has found one question in particular sparks easier charitable conversations.
It’s not, “What do you want?” or “What can we do for you?” or “Do you want to save taxes?” The question which leads clients to talk more readily is: “What do you want your money to do?”
Michael says, “When you ask the right question, you can transition to solutions suited to your clients. They are allowing you into their world.”
When he asked Tim and Marsha what they wanted their money to do, Michael was brought into their world of farming. The longtime clients planned to finance the sale of their operation to a young farmer and then donate the monthly payments to a land conservation society whose mission is to preserve agricultural land for future farmers.
But when Michael tried to coordinate the sale with the organization, he discovered it wasn’t able to manage such a sizable gift in the form of regular mortgage payments. Then Marsha’s death after a brief illness delayed the transaction. Meanwhile, the young farmer had secured financing, and Tim’s plan was to donate the $650,000 lump sum from the sale.
Michael collaborated with his client’s accountant to develop an alternative plan, and he enlisted the help of Thrivent Charitable, which he has partnered with on behalf of many clients during 20 years with Thrivent.
“Thrivent Charitable plays a huge role in carrying out the game plan,” he says. “You can bounce concepts off the gift planners and get their input. Then, they help with the documentation and details.”
Rather than be taxed on the capital gains on the farm sale, Michael recommended his client donate an equivalent amount of securities to a donor-advised fund at Thrivent Charitable. In time, the land conservation society will receive two major gifts from the fund.
The client then invested the money from the farm sale, which reset the cost basis for those investments. And though the gift of securities was income-tax deductible, Michael says, “It’s not about taxes. It’s about having conversations with somebody who wants to give.”
Charitable options lead to more business
Michael believes educating yourself about charitable concepts is as important as asking clients the right question. “When you understand charitable options, you will see more opportunities when talking to clients,” he says. “We’re stewards helping people accomplish their stewardship mission.”
Michael calls the referrals he receives a “wonderful result” of building trust with his clients. “When you bring value like this, when you’re the one they call, it leads to more business,” he says, noting the land preservation society has referred prospective donors to his practice as well.
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