Today, Doug talks with Julia Reed, National Director of Charitable Consulting at DAFgiving360TM, about how advisors can strengthen client relationships through philanthropic planning. Julia explains how donor-advised funds (DAFs) offer tax-smart, flexible solutions that align financial strategies with personal values, while helping advisors deepen multi-generational ties and differentiate their practices.
She shares key moments to introduce charitable giving conversations, strategies to maximize the impact of donations, and how DAFs fit into retirement and legacy planning. Julia also highlights resources advisors can use to build confidence around philanthropy and encourages viewing charitable planning as a meaningful, relationship-driven part of wealth management.
If you’d like to learn more about working with DAFgiving360 and the benefits to both you and your clients, review their online resources or request more information.
Related: 10 Ways To Help Clients Give More to Charity and Reduce Taxes
DAFgiving360™ is the name used for the combined programs and services of Donor Advised Charitable Giving, Inc., an independent nonprofit organization which has entered into service agreements with certain subsidiaries of The Charles Schwab Corporation. DAFgiving360 is a tax-exempt public charity as described in Sections 501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi) of the Internal Revenue Code.
Contributions made to DAFgiving360 are considered an irrevocable gift and are not refundable. Once contributed, DAFgiving360 has exclusive legal control over the contributed assets.
Contributions of certain real estate, private equity, or other illiquid assets may be accepted via a charitable intermediary, with proceeds transferred to a donor-advised fund (DAF) account upon liquidation. Call DAFgiving360 for more information at 800-746-6216.
A donor's ability to claim itemized deductions is subject to a variety of limitations depending on the donor's specific tax situation.
DAFgiving360 does not act as trustee or custodian. Donors should consult their legal or tax advisor about their particular circumstances.
DAFgiving360 does not provide legal or tax advice. Please consult a qualified legal or tax advisor where such advice is necessary or appropriate.
©2025 Donor Advised Charitable Giving, Inc. All rights reserved.
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Transcript:
[00:00:00] Doug Heikkinen: This is Advisorpedia's Power Your Advice podcast, and I'm Doug Heikkinen. Please welcome Julia Reed, the National Director of Charitable Consulting at DAFgiving360™. Julia, welcome to the podcast.
[00:00:12] Julia Reed: Thank you, Doug. Happy to be here.
[00:00:14] Doug Heikkinen: So I've never met you before. . .
[00:00:21] Julia Reed: Absolutely. As you may know, DAFgiving360 is a national donor-advised fund. We're also an independent 501(C)(3) public charity with a mission to increase charitable giving in the United States. We do this by offering donor-advised fund accounts and also related philanthropic resources, all in order to make charitable giving more efficient and effective for advisors and their clients, our donors.
My team specifically, the charitable consulting team, is responsible for increasing and engagement with advisors and their clients. We do this primarily through education around tax smart philanthropy, and we also will engage with their teams and help educate them on the conversation around charitable planning.
Donor-advised funds specifically, for those that aren't familiar, provide a tax smart, simple way to give to charity. They're like a charitable investment account with the main purpose of helping donors maximize their support for charities that they care about the most. And it also allows them to pre-fund that charitable giving in tax years where they have taxable events or high income.
[00:01:36] Doug Heikkinen: Let's start with the big picture for advisors. Why should they incorporate philanthropic planning into their wealth management practice?
[00:01:44] Julia Reed: Well it's a great question, and one we get pretty frequently. It helps advisors differentiate themselves as a trusted advisor to their clients. It's also a pretty key element, very key element, to a comprehensive financial plan.
There are lots of components including tax, estate planning, trusts, and then financial planning and charitable is a very key part of that conversation. 78% of our donor account assets at DAFgiving360 are associated with advisors.
And this really speaks to the conversation that many of them are having with every single client. It opens the door to conversations about values, family, and legacy, and it really helps them deepen the relationship that they have with clients, these advisors.
By integrating the giving conversation into legacy and retirement strategies, advisors help their clients reach goals. Strengthen their multi-generational relationships. They retain clients through generational transfer. We also find that advisors who engage in philanthropic planning often find it personally rewarding, not just for their clients, but also for them individually and their families.
[00:02:59] Doug Heikkinen: I think the multi-generational aspect of this is really important. Can you dig into that a little bit more?
[00:03:05] Julia Reed: Absolutely. We've all heard these numbers, but I'll say them again. Cerulli Associates estimates that $18 trillion will flow to charity over the next 24 years just through wealth transfer.
That's an average of nearly $750 billion per year. Involving a client's family members in these discussions helps that advisor create meaningful relationships with next generation, spouses, partners, the family members. This fosters trust and continuity makes it more likely those relationships will continue over time through transition.
[00:03:40] Doug Heikkinen: Okay. Now that we've talked about the why, let's shift to the how. Can you walk us through how advisors can effectively integrate philanthropy into retirement and legacy planning?
[00:03:51] Julia Reed: Absolutely. I think there tends to be some particular triggers that you see. Many times it's tax. And so looking out for liquidity events that may be imminent. High income years, I mentioned low basis positions when they're looking to diversify. So anything that's going to create a taxable event for a client, that's an optimal time to bring up charitable giving. And understanding their values, passions, and goals is also important, but that's a much different conversation than thinking about the tax implications or opportunities that there are with giving. So there are some questions that you can ask as an advisor to start that conversation.
If you're coming from the angle that is less tax focused and more values and goals focused. Things like are there specific organizations, causes, or initiatives you'd like to support long term? Or how would you like your family to be involved in your philanthropic legacy? We also see advisors talking about their own giving as a way to begin the conversation, and sometimes even with tools that they're using. We'll encourage advisors to use those tools themselves in their own personal life and with their team as a way to familiarize themselves with the tools before using them with clients. Advisors can also help determine the right vehicles that a donor should use, and DAFs can have a lot of advantages, especially when it comes to donating complex assets.
As I mentioned, public securities is mostly what we do, but we also accept things like real estate, privately held businesses. But we also have a lot of donors that use foundations and charitable trusts. So having a basic understanding of those vehicles and how they can work together and individually to support a tax efficient, multi-generational plan is really the most effective way to approach it.
[00:05:43] Doug Heikkinen: Can you elaborate how DAFs fit into legacy retirement planning specifically?
[00:05:49] Julia Reed: Absolutely. So DAFs offer a way for clients to set aside, pre-fund an account, for giving in a year when they need it, right? That taxable event, their peak earning years, for example. This can provide immediate tax benefits.
And then in retirement, when they're not experiencing the high income peak earning years, they can continue to give and support the charities that they care about the most at the same level that they were during their career. Let's say you have a client who's 55 and he plans to retire at 65.
He's in a high tax bracket, but expects income to decrease in retirement. By contributing to the donor-advised fund now, he can potentially reduce that current tax burden while creating a pool of charitable funds to use later on in retirement. Additionally, DAFs can be an excellent tool for managing required minimum distributions.
A client reaches 72, they might start taking RMDs from a traditional IRA and 401k. By directing some or all of that RMD to a DAF, they can satisfy that distribution requirement while supporting their favorite causes potentially reducing their taxable income. One thing I will point out is that the qualified charitable distribution, which becomes available at 70 and a half, those distributions must go directly to an operating charity without a stop first to a donor-advised fund or private foundation.
But that's definitely a strategy to be aware of as an advisor as well.
[00:07:17] Doug Heikkinen: Now, thinking beyond retirement planning, why would a DAF be a good tool for advisors supporting their clients' legacy planning?
[00:07:26] Julia Reed: They offer great flexibility from a legacy planning perspective. DAFgiving360 and advisors help ensure continuity of philanthropic goals that you'll see from a donor during their lifetime, but it can also create a lasting legacy for giving that's happening posthumously.
For example, with a donor-advised fund at DAFgiving360, family members or other individuals can be named as successor donors on the account. So they would essentially take over the privileges on the account once the donors pass away. Another option is recommending charities as beneficiaries of final grants as a percentage of your account balance.
And then the third option would be recommending those charitable beneficiaries for recurring grants over time from the account, sort of on autopilot, as a percentage. And the three options are not mutually exclusive. So theoretically a donor could create an account that is some portion of it goes to successor donor advisors.
A portion goes in lump sum to those charitable beneficiaries, and then a percentage of the account is distributed to charitable beneficiaries over time. So it provides a lot of flexibility, even if the account is funded at death. And we do have donors that have set up their donor-advised funds, they're using it for their lifetime giving, but they're also going to name it as beneficiary on estate assets so they can continue to support those causes from a legacy perspective.
[00:08:54] Doug Heikkinen: Advisors are always trying to add value to their clients. So how can advisors help clients maximize the impact of their giving?
[00:09:02] Julia Reed: There's a myriad of ways they can do this. And I think again, it comes down to the more technical aspects of an advisor conversation and looking at the tax implications. We talked a little bit about non-cash assets. So giving the lowest basis asset that a client has in their portfolio, as long as they've held it longer than one year, this can actually increase the funds that they donate by up to 20% while also maximizing their deduction.
Also, some charities aren't equipped to receive these types of donations, so giving it directly to a DAF and then distributing it in cash from the DAF to the operating charity is a nice strategy to support smaller charities that aren't equipped themselves. We can also liquidate those funds before they're granted out, and it makes it just simpler from the donor perspective, but also for the receiving charity.
There's also a lot of ways that an advisor can help a client give strategically with the soft skills and tools that are available. So we've created a giving guide specifically for advisors to use with clients that's modular so they can help them do things like find their focus or involve their family.
So there's a lot of tools out there to have a deeper, more meaningful conversation even beyond the tax piece, which is oftentimes the trigger, as I mentioned earlier.
[00:10:20] Doug Heikkinen: What about advisors who might feel a little less confident about their knowledge in this area? I'm sure you guys are there to help.
[00:10:27] Julia Reed: We are absolutely, and it's a common concern, as you may know well. But it's also really an opportunity. We have a lot of resources specifically to answer this question, both for advisors and that are ready made for their clients, from articles on tax strategies to tools that help them find charities that align with goals, kind of like that giving guide I just mentioned. Additionally, advisors can get more comfortable with the basics of charitable vehicles like donor-advised funds, trusts, and foundations. There's a lot of resources out there, including resources on our website at DAFgiving360.org.
We also have articles on tax implications and white papers, specifically by asset type, on contributions of things like pre IPO shares, equity compensation, real estate, privately held interests, and real assets. So there's a lot of information out there. But I would definitely recommend contacting us and looking at our website for resources that help with the conversation because we do, get that question quite a bit.
[00:11:35] Doug Heikkinen: Excellent advice. As we wrap up, what final thoughts would you like to share with our advisor audience?
[00:11:41] Julia Reed: I would love to just encourage advisors to continue to see philanthropy and charitable giving as a key component of their practice and their offering with ultra high net worth clients and any wealth management clients, really. 98% of high net worth families give to charity.
Many of them don't often equate that to philanthropy. And so using the language that they do around their giving, they oftentimes will see it as their civic duty. And it really is an opportunity for an advisor to engage their clients in a new way and deepen the relationship. It's not just about the tax benefits, which are many.
It's also about helping them create meaningful legacy, and achieving their personal goals, and communicating their values to their community. So we appreciate the interest and we're here as a resource and we'd like to continue to see advisors engage their clients in this meaningful conversation.
[00:12:38] Doug Heikkinen: Julia, it's great information you just shared with us. It's stuff that every advisor should know, and it was a pleasure to have you on.
[00:12:44] Julia Reed: Thank you so much, Doug.
[00:12:46] Doug Heikkinen: To learn more about DAFgiving360, please visit DAFgiving360.org. We are on all social media platforms @Advisorpedia. Please give us a follow. For our producer Tory Miller and everyone at Advisorpedia, thank you for listening.