Finding common ground: Planned Giving Officers

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Finding common ground Planned Giving Officers
Financial Advisors
Presented by
William Sutton, Jr. Head of Philanthropic
Services, US UBS
2012
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Section One

• Why are Financials Service Firms Into
  Philanthropy

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The Business of Philanthropic Services
Why are Financial Services Firms in philanthropy
Wealth Transfer
Designate Advisor
Change Firms
Evolving client needs
firms are moving beyond investment advice
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Endowment Foundation Services The Opportunity
Endowment Foundation assets in the US
U.S. Market Opportunity

• 2.56 Trillion AUM and over 1,000,000 public
  charities
• 64 of HNW clients serve on non-profit boards

Business Opportunity
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Focus on more than asset management
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UBS Philanthropic Services a global presence
We provide you with expertise and solutions to
deliver positive change

• Philanthropic Team
• UBS commitment to philanthropy goes back many
  years. Our team covers over 30 dedicated experts
  globally and we look back at over 10 years of
  successful hands-on experience with our in-house
  foundation, engaging in over 70 countries
  worldwide.

Paris
Zurich / Geneva
New York
Atlanta
Hong Kong
Singapore
Headquarters 6 regional offices Projects
InitiativesUBS Optimus Foundation
Sydney
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UBS Philanthropic Services A Local and Global
Presence
Providing unique knowledge exchange,
administration investment and peer-share services

• UBS Philanthropic Services
• Works with over 20,000 charities across the U.S.
  and thousands more globally1
• Serves 3,500 private foundations in the U.S.
• Selected Best Global Philanthropy Services2
• Over 50 Billion Managed and Advised
  Philanthropic Assets in the U.S. alone
• Services for private foundations, donor advised
  funds, charitable trusts, endowments and
  foundations

• Recent UBS Philanthropy Events
• UBS Global Philanthropic Forums and Roundtables
• UBS Optimus Foundation
• Next Generation Philanthropy Singapore, Zurich
  and New York
• Visionaris Social Entrepreneurship Award in Latin
  America UBS Ashoka
• UBS US Philanthropic Roundtables
• Q Series on Sustainable Investing
• Mission Related Investing Roundtables
• Family Office Forum
• Coaching Roundtables Customized training and
  peer sessions for Endowment and Foundation
  Leadership

Best Philanthropy Services in the World Euromoney
2012
1 National Center for Charitable Statistics 2
Euromoney Private Banking Survey, 2012for the
year 2011
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Benefits of Charitable Planning
Charitable planning brings life to clients
values and supports the community, and also
benefits financial advisors Uncover more
assets - Assessing a clients charitable goals
may uncover assets held away Increase revenue -
Charitable planning may lead to solutions such as
life insurance, donor advised funds and
trust services Build relationships across -
Conversations may lead to relationships with
clients heirs and their multiple generations
friends who share their causes Develop
strong referral - Establish productive
relationships with your clients other
advisors sources Insulate your client -
Addressing charitable planning positions you to
maintain control and relationships
coordination over all aspects of your clients
financial life - Successfully helping clients
address some of their most personal needs
enhances their trust and confidence in you
Source UBS From Planning to Action, Delivering
Wealth Management Advice Charitable Planning
2012
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Why are financial Services firms in Philanthropy
The Lucky 9
Talk About Planning
Real Conversations
The Lucky 9
Active Philanthropy
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Section Two

• The Landscape

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The Landscape
Recent Charitable Trends

• Research - History
• 1990s TPIs series of professional advisor
  surveys
• Financial Advisor philanthropic dialogue with
  clients
• intermittent
• focused on estate planning not philanthropy goals
• In 1999, Schervish and Havens document 41
  trillion intergenerational asset shift
• By 2004, TPI reflects shift in advisor practices
  on talking about philanthropy with clients
• 80 discussed philanthropy with clients
• 38 said very important
• 75 said good for business
• 8 reported such discussions generated revenue

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Philanthropic LandscapeRecent History
Americans donated 298 Billion in 2011
Giving USA Foundation 2008
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Section Three

• The Pew Charitable Trust Survey of Financial
  Advisors

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What are the top three concerns of your existing
client base?
Insight
Transferring wealth effectively and efficiently
(i.e., multigenerational planning) Tax
minimization

• Outliving assets and not having enough for
  retirement
• Volatile markets (i.e., short-term market
  problems and the economy)

Philanthropic effectiveness Bringing children
into the familys philanthropy
Asset preservation Teaching heirs to use wealth
responsibly
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What is the greatest challenge to addressing your
clients philanthropic needs?
Recent Charitable Trends

• What do advisors need?
• Lack of advisor expertise in philanthropic
  planning I need to learn the topic more.
• Financial insecurity Market conditions have
  clients concerned that they will not have enough
  to support family needs over the long term.
• Lack of company-provided product My company
  does not have a donor-advised fund.
• Lack of client direction Most people have a
  vague idea of being charitable, but no clue what
  they really want to do.
• One advisor was clear that training was needed on
  the softer skills.

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Addressing your clients philanthropic needs
Recent Charitable Trends
Dow at 14,000 Education, Education Education
Tools and Resources Access to Philanthropy Experts
More forums to share experiences and exchange ideas Deeper training in estate planning and immediate tax benefits
Discussion on philanthropic strategy not selling a product Turn key solutions

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Survey Takeaway Amplifying the Philanthropic
Dialogue
Recent Charitable Trends
Philanthropy is being talked about more than ever within financial services firms and among advisors and their clients.
80 report that their firms discuss philanthropy as a client service more often
90 indicate that their firms are marketing philanthropic planning services.
More advisors are asking their clients about philanthropic planning interests
63 report that their clients are talking more about philanthropy
93 believe that the aging baby boomer population will create a greater need for philanthropic planning services
91 of advisors believe that being able to address philanthropic needs would help differentiate themselves in the eyes of existing and would-be clients

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Section Four

• Practical Opportunities

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Selective Partnership
Recent Charitable Trends

• The Right Advisor
• 10 plus years in the business
• Serves on nonprofit boards
• Practices holistic wealth management
• Embraces financial planning
• Open to partnership
• They talk to (not through) the spouse/partner
• They know which charities their clients support
  and why
• Philanthropic Financial Planning

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Understanding the Advisor
Recent Charitable Trends

• Compensation and Competition friction and frank
  conversations
• Commission/Salary Bonus or Recognition
• Donations, Wills and Trusts Assets leave the
  firm
• Overpromising Development Director
• Why would I ever introduce you to my best
  client
• Its not you, its me

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Understanding the Advisor, cont.
Recent Charitable Trends

• Hurdles to charitable planning
• Advisor and Comfort Discomfort
• Perceived client disinterest
• Speaking to the wrong client
• Infrequent meetings/limited time
• Short term relationships
• Conflict avoidance transactional planning is
  easier
• Lack of competence

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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You might need to adapt
Recent Charitable Trends

• Avoiding Friction and the new reality
• Donor/Client life events vs. nonprofit
  fundraising schedule
• Bequests Discuss with Advisors
• Client and Advisor control assets managed
• Commercial Donor Advised Funds Fidelity,
  Calvert/Impact, UBS, Comerica
• Community Foundations KC and Atlanta
• Restricted endowment assets

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Philanthropic Conversation
Charitable Giving Who starts the conversation?
Client Initiated
Advisor Initiated
93 7
90 10
80 20
68 32
48 52
Attorney
Accountant
Financial Advisor
Bank/Trust
Nonprofit
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Philanthropic Planning
Nonprofit assistance Help close the 80/20 gap
Financial Advisors
Marketing materials tools for effective giving
w/o overselling
Include advisors in annual meetings to learn
about mission plus educational updates re
charitable planning
Educational workshops
Active Philanthropy
Concrete illustrations of donor success
Issue based information about community needs and
how effective local nonprofits are at addressing
needs
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Opportunities
Recent Charitable Trends

• Understanding the win-win
• Educating the Financial Advisor
• Serving as the expert resource for the advisors
  clients

• 1 Andrew Hastings 2011 Donor-Advised Fund
  Report, National Philanthropic Trust.
  http//www.nptrust.org/images/uploads/201120Donor
  -Advised-Fund-Report28129.pdf
• 2 McAllister, Brian P and Timothy R. Yoder
  Closing Up Shop How to Successfully Shut Down a
  Private Foundation

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Section Five

• Continued Discussion