Advisers to the Wealthy Predict Rise in Giving

The Fidelity® Charitable Gift Fund (“Gift Fund”) released findings from new research showing that 87 percent of financial advisors expect income taxes to increase for most of their clients in the next 12 to 18 months, with one in four (26 percent) predicting their clients will increase charitable giving in order to offset tax hikes. An additional 48 percent of advisors expect their clients to maintain their level of giving, despite ongoing market uncertainty and an overall decline in U.S. charitable giving in 2009.

Advisors Reveal Donor-Advised Funds Usage Is on the Rise

When asked which giving vehicle they expect to see increase in use over the next five years, twice the number of advisors said donor-advised funds (39 percent) compared to private foundations (20 percent).

“While they can be used in tandem, a donor-advised fund offers several advantages over a private foundation, including donor anonymity, fewer administrative burdens, lower costs and greater tax advantages,” said Sarah C. Libbey, president, Fidelity® Charitable Gift Fund. “Because the choice of charitable vehicle is based on each individual’s – or family’s – personal circumstance, advisors play an important role in helping them choose the vehicle for their distinct needs.”

The ability to help simplify giving was the No. 1 reason why advisors thought donor-advised funds’ usage would increase (75 percent). This was followed by ease of administration (74 percent) and favorable tax treatment (58 percent). Advisors who are knowledgeable about donor-advised funds said they are suitable for clients who seek an immediate tax deduction but prefer time to decide where to disburse grants (65 percent). They also said that donor-advised funds are good for those who have reached a certain asset level (60 percent) and those who want to keep and access all of their charitable records in one place (42 percent).