In the jurisdictions that you operate in, what sort of trends do you see in terms of what causes people want to support and why? What causes/objectives seem to be gaining ground, staying the same, or losing some momentum?
There is a rise in values-based philanthropy. The causes and organizations donors support are increasingly driven by their personal values and passion for a particular issue – whether it’s medical research, climate change, education or advancing women and girls. We help clients align their giving and personal values to help them reach their philanthropic goals.

At the same time, we’re seeing evidence that the focus of giving is shifting somewhat from places to causes, particularly among younger donors and more recently established family foundations. According to our latest Study of High Net Worth Philanthropy, while basic needs continue to lead all other charitable categories, we observed nearly a 10 per cent  decline, from 63 per cent in 2015 to 54 per cent in 2017. It also shows that Millennial donors are less likely to support basic needs organizations compared with older generations .

What’s important to remember is that causes and the community needs aren’t necessarily mutually exclusive. Community groups and nonprofit organizations will need to work harder to educate donors about community needs and their connection to larger causes.

In general, we see the top five charitable categories have remained relatively the same since 2015: basic needs, religious or spiritual organizations, healthcare or medical research, combined charities and youth or family services.

When you talk to clients, in your experience is it the client or advisor who brings up philanthropy first? Is this changing? If it is the client, what do they often say? If it is the advisor, what does the advisor say?
Increasingly, advisors are recognizing that conversations about charitable giving are critically important to their clients, and to the advisor-client relationship. In our research on The Philanthropic Conversation, we found that 80 per cent of advisors today make it their practice to ask their high net worth clients about philanthropy. That’s up by nine percentage points from 71 per cent in 2013. However, there is a split in perception about who initiates the discussion. Advisors we have surveyed say they typically initiate the conversation, whereas clients say they are the ones starting these discussions.

What we know from clients and our research is that it really doesn’t matter who brings it up first, as long as the philanthropic conversation is taking place. What matters to clients is when the conversation begins and the focus of the discussion when it’s initiated. While advisors tend to wait until after they have a full understanding of their clients’ financial pictures, our research found that 95 per cent of clients want and expect to discuss philanthropic goals within the first three meetings, and nearly one in three want to discuss philanthropy at the very first meeting.

We also know that clients want to begin talking about philanthropy in terms of their personal goals, not the more technical aspects of it such as tax benefits and estate planning. We’re seeing significant progress in this area, with more advisors saying they initiate the conversation by asking about personal topics -- What are clients passionate about? What are their philanthropic goals? What causes or organizations are they interested in and why? What do they want their legacy to be?

However, we still see a significant disconnect in perceptions between advisors and clients. Advisors report that about 41 per cent of focus of their philanthropic conversations with clients is on personal topics, whereas clients say that about 63 per cent of the conversation is technical in nature. Part of this disconnect may be because some professional advisors, especially those who focus on only one aspect of a client’s financial needs, overstate the importance of tax benefits as a driver of charitable giving. Nearly half of advisors believe that the wealthy give because of the tax benefit, when just 16 per cent of the wealthy say taxes are what motivates them to give.

There’s quite a “toolbox” today for giving: Donor Advised Funds, private foundations, trusts of various kinds, etc. Do you see any trends in structures becoming more, less popular, and why?
There are numerous philanthropic tools available to make giving impactful. It is a matter of finding the right strategy that aligns with a client’s goals and objectives.

Our study of The Philanthropic Conversation found that the use of giving vehicles has increased since 2013 and is correlated with more advisor involvement. Among HNW individuals who discuss philanthropy with an advisor, 53 per cent use one or more structured giving vehicles when making donations to charitable organizations.

As we have observed in the Bank of America Charitable Gift Fund, donor-advised funds are growing in terms of the number of individual donor-advised funds, total grant dollars from them, total contributions to them and total charitable assets in them. In fact, the latest donor-advised fund report by the National Philanthropic Trust , shows that donor-advised funds to qualified charities have nearly doubled in the past five years. Over this same time period, contributions to donor-advised funds have increased by 86 per cent . And grants from donor-advised funds to qualified charities have grown at a compound annual growth rate of 17.4 per cent over the past five years, reaching a record high of $23.42 billion in 2018.

Part of what’s driving this growth is an increase in the number of new individual donor-advised fund accounts, which has risen sharply with the emergence of new donor-advised fund giving models, such as employer-sponsored donor-advised fund accounts. There also are new tools, like mobile apps and credit card rewards processing, that make giving through a donor-advised fund more accessible and convenient. Donor-advised funds offer flexibility and tax benefits that make them attractive especially to younger donors and families looking to engage younger members in philanthropic decision-making.

Tax breaks can motivate some giving – where do you see tax changes posing a threat or creating opportunities in certain countries?
In the US, two years after the passage of tax reform, it’s still too early to know whether the law will hurt American philanthropy in the way many nonprofits feared. Giving held steady in 2018, the law’s first full year. Yet what we’re seeing confirms that donors are less concerned about the tax implications of giving than the media and even some advisors and other professionals had thought.

Our latest Study of High Net Worth Philanthropy found that the primary motivation for charitable giving is personal values and a genuine interest, or concern, for a particular cause. Giving decisions are typically anchored deeply in personal beliefs, values and traditions, which tend not to change with tax laws. In fact, just 17 per cent of the donors we surveyed say they always give for the tax benefits.

That’s not to say that taxes aren’t a consideration. An additional 51 per cent of donors said that tax benefits sometimes motivate their giving. It’s still too early to know for sure the full extent of the impact of tax laws on giving levels. This year, when taxpayers have had more time to process the details, may better show its long-term impact.

Because the tax laws substantially altered deduction rules, some donors are looking for tax-efficient approaches to giving, such as combining several years’ worth of donations in a single year, donating shares of appreciated stock or other securities and, for older donors, giving directly from their IRA. But while donors may consider how best to structure their giving to be tax-efficient, their motivation ultimately remains driven by their values and desire for impact.