Do I Need FAR If I Have a Financial Advisor?
August 31, 2022
Far from being a competitor, the Fund for Academic Renewal (FAR) complements the services of donors’ financial advisors. Our expertise in higher education giving (and its oft bureaucratic landscape) can aid donors wanting to be financially savvy and philanthropically effective.
Financial advisors are licensed professionals who consult with clients on their personal finances to help them meet their financial goals. Donors rely heavily on these advisory services, but additional guidance is crucial for charitable giving.
According to a 2012 study by the U.S. Trust Bank of America Corporation and the Philanthropic Initiative, 55% of high-net-worth individuals say they discuss philanthropy with a professional advisor. But only 41% are satisfied with these conversations, revealing a disconnect between clients’ expectations and financial advice. Clients want to discuss philanthropy, but 71% of advisors say they approach giving “from a technical perspective” rather than focusing on clients’ “goals or passions.”
FAR puts clients’ goals and passions at the center of our consultations because we believe that effective gifts require a clear vision. Thanks to the generosity of the Diana Davis Spencer Foundation, FAR’s services are free. In the beginning, we have an introductory phone call with the client to talk about his or her philanthropic goals and how to achieve them.
Once donors establish their vision, advice from both financial and philanthropic experts can help them avoid pitfalls. A financial advisor knows a client’s financial details and can advise on the amount and source of giving (e.g., Roth IRA, savings, and stocks). A philanthropy advisor, like FAR, helps donors find compatible recipients and can advise on the structure of the gift; important gift agreement clauses, such as giving in installments and naming an alternative beneficiary; and protecting donor intent.
With a team of reliable consultants working together, donors can make wise decisions about their charitable giving and be confident that their gift reflects their vision and values.