Few accountants today seem to realize how lucrative a field charitable planning is; each year, people from disparate financial backgrounds are eager to donate some of their hard-earned money to charities, and many of them need a savvy CPA’s help, particularly when it comes to writing off said donations when filing their taxes. As you’ll come to see, it can be incredibly easy, not to mention morally and professionally beneficial, to help your clients master philanthropic giving.
Giving back to your clients
It’s no secret that today’s CPAs are expected to go above and beyond the call of duty; it seems as it today’s customers expect an accountant to be able to do anything and everything at once, juggling auditing duties with charitable planning and other firm duties at the same time. With the right planning, however, you don’t have to overextend yourself, and can offer your clients a valuable service that will be a huge boon to your long-term relationship.
The first thing you must understand when it comes to mastering charitable giving is that you can be philanthropic and strategic at the same time; your clients are likely kind-hearted people donating for the moral reasons, but that doesn’t mean they can’t benefit from those donations, too. With some 98 percent of high-net-worth households donating to charity in some form, it’s imperative that you formalize a process for offering charitable planning to your clients, unless you want to lose them to the competition.
You want to be absolutely positive that your client doesn’t make a foolish mistake like improperly deducting contributions for which they aren’t entitled, which could land the both of you in some legal hot water. That’s why you should take the time to review the signs that your client is struggling with charitable planning, as it will prove invaluable to you when it comes time to decipher which of your clients need the most help.
Once you’ve determined which of your clients is in need of your attention the most, you can set to work. You should be constantly reminding your clients that giving money by cash or check is admirable, but not the only way you can donate to a charity while getting a nice deductible. Publicly traded appreciated securities your client has held onto for more than a year, for instance, can be the source of philanthropic giving, though many of your wealthier clients with extensive holdings in the market may be unaware of this.
Your client should also be aware that they’re not restrained to charitable giving during their lifetime; they can arrange for further philanthropic donations after they’ve passed away, which obviously won’t yield tax benefits to your now-deceased client, but would still prove to be a morally righteous act likely to help people. Come to have a comprehensive understanding of the charitable landscape, and you’ll be able to better convince your clients that they need to think of the long-term when it comes to their philanthropy.
Avoid simple mistakes
While many CPAs and their clients approach philanthropic issues with relatively little concern, given that it’s often only a mild blip on many people’s financial radars, you can’t afford to make a mistake when it comes to handling your client’s assets. That’s why you should also take time to review commonly-made mistakes by CPAs when it comes to handling their client’s charitable planning, and ensure that you’re mucking things up from the get-go.
You certainly wouldn’t want to donate an inappropriate asset in your client’s name, for instance, or allow yourself to become unmoored from responsibilities to your client and firm by being a loose cannon with someone else’s money. A vital part of being a masterful charitable planner is having a comprehensive understanding of your client’s specific financial situation, especially if they're starting a business, which could change rapidly and make philanthropic giving untenable in the short term.
You should understand that, when it comes to becoming a charitable planner for your client, you’ll need to form a certain type of relationship with them. You shouldn’t be counselling your clients to make philanthropic donations for the purpose of getting a tax write-off, after all, but rather speaking with them on a personal basis about the goods of donating some of their hard-earned wealth. You don’t want to appear overly-hungry to donate for the purposes of a deductible, but should instead stress the many positive benefits of giving to charity as the primary motivation behind giving to others.
Leaving a valued legacy is an important part of your client’s personal lives, and they’ll need your help. Don’t mislead them by accident – brush up now on charitable planning, so that you won’t be caught on the wrong foot when your clients bring it up. With proper investment and charitable planning, both you and your client will be better philanthropist in no time.
Cost accountant with major focus in SAP/General Fund Enterprise Business System (GFEBS). Also, main functional inspector for accounting/finance audits for internal reviews as well as the Statement of Budgetary Resources audit initiative.