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Poll Results: Advisors Must Put More Emphasis on Discussing Charitable Giving

Posted: January 09, 2018 By : Knowledge Bureau Staff
Posted in: Strategic Thinking, knowledge bureau, tax returns, charitable giving, Evelyn Jacks, income tax, tax courses, financial advisors, tax advisors, financial education, Knowledge Bureau poll, online education, Super Donor Credit, donation tax credit, charity tax credit, resolutions

In December, we asked Knowledge Bureau Report readers, “In your opinion, are tax and financial professionals taking the time to help clients understand the benefits of charitable giving?” In a surprising result, only 17 percent thought their peer group was spending enough time counselling their clients how to make donations in a tax-efficient way.

This is a shame, particularly because 2017 was the last year in which the Super Donors Tax Credit was available for first-time donors - unless this year’s Federal Budget extends the rules.

According to the December poll results, most who participated agreed that tax and financial professionals just aren’t taking the time to help clients understand the benefits of charitable giving – whether that means focusing on how they can maximize the resources they have to give, or how supporting their causes can also benefit them personally.

In one insightful comment, financial advisor Ian Wood shared how tax and financial advisors might be able to help their clients maximize the difference they’re able to make:

When asked, most people who give do not identify taxation as a primary reason for giving. The top responses typically focus on making a difference.

It is important to have conversations with clients to ensure they understand that there may be more efficient ways to give to their favourite charities and that they are taking advantage of the tax system to maximize their ability to give.

How many of your clients are going out and spending after-tax cash on cans of food to donate to a shelter, when they could donate stocks in-kind and make a significantly more impactful gift for the same net cost to the client?

Let your clients understand that you support their desire to give, and let them dream a bit bigger by giving more efficiently.

Of course, clients not currently involved in charitable giving might be encouraged by the tax benefits they can receive as well. This begins with prompt and complete record-keeping as charitable donations are often audited. Advisors can discuss the details of filing audit-proof claims on their 2017 tax returns now. For specific details, refer to the Knowledge Bureau article “It’s Better to Give…Before the First-Time Super Donors Credit Disappears.”

   

A great new year’s resolution for 2018 for professional tax and financial advisors: take the time now to discuss charitable pursuits in 2018 with your clients, and throughout the upcoming tax season. Knowledge Bureau can help with several courses:

  • Investment Strategies in Charitable Giving explains how to integrate charitable giving strategies into your annual reviews with clients, outlines many different ways for clients to accomplish their philanthropic goals in a tax-efficient way and helps you understand your role in your clients’ charitable giving.
  • The DFA–Tax Services Specialist designation program will give you in-depth insight into the tax implications and advantages of charitable giving, enabling you to counsel clients on the most appropriate and tax-efficient strategies for their particular situation.
  • And our Donations Savings Calculator (in the Transition section of the Knowledge Bureau Calculators) provides an excellent, sophisticated planning tool to help you personalize and customize your advice for each client.

Additional educational resources: Advanced Family Tax Preparation course, Real Wealth Manager Program

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