Case Studies and Articles

Team Building and Expanding Your Practice – Vaughn W. Henry

Team Building and Expanding Your Practice – Vaughn W. Henry

Team Building and Expanding Your Practice

Understanding why the curmudgeon client is a latent philanthropist.

The challenge in today’s estate planning environment is to find ways to put round pegs and round holes together, and match up client needs with advisor skills.  Since nobody can claim to have all the answers all the time, it makes sense to use as many experienced technicians in the construction of a plan as is needed.  The problem is that while professional advisors like to think of themselves as logical and analytical experts, clients don’t complete their estate planning for those reasons.  Reluctant clients might start the planning process with appeals to their tax averse nature, but without being motivated to finish by emotional or values driven needs, the construction of an elegant plan gets stuck on the drawing board.  For most clients, even when there’s not a charitable bone in their body, there’s an overwhelming desire to regain control of their planning.  Control of social capital, (defined as both charitable gifts and assets that would default to the tax system unless proactive choices are made) redirected to family influenced charitable projects gives clients an improved sense of control, and when that happens, those latent charitable interests surface.  If “cause or community capital” is more appropriate than “social capital” in a client’s mind, then develop that line of thinking as a way to explore options, but emphasize choices are available in the planning technique.

With all of the political posturing and talk about eliminating the “death tax”, an already skittish client is looking for any excuse to avoid long term planning, even when there’s no estate tax liability.  A few clients take the benign neglect approach, ignoring the problem and hoping it will go away by itself.  Others have likened it to grabbing hold of a tiger’s tail: Once they have it, they don’t know what to do with it.  To help them move out of either mindset, consider a more holistic approach to the design process.  Good plans usually are the result of a coordinated team effort.  Combine the well-briefed client, professional advisors and when there’s a charitable component, a nonprofit organization’s planned giving officer, and there’s a better chance of success.

“I find it fascinating that most people plan their vacations with better care than they plan their lives.  Perhaps that is because escape is easier than change.”

— Jim Rohn

With increased commoditization of services, most advisors offer only variations in products and services, so it makes sense to take client – advisor dealings to a higher level based on values and enhanced relationships.  To help clients achieve personal significance, an increasing number of planners are incorporating a charitable component in their estate plans, and that takes a real leap of faith for a lot of clients who don’t see themselves as altruistic donors.

“One thing is for sure. I won’t leave a lot of money to my heirs because I don’t think it would be good for them.”

— Bill Gates, Forbes, May 19, 1997

When charitable tools are introduced, very often the already unstable mix of advisors soon includes a development officer representing the philanthropic interests of the client donor.  Why is this a source of added turmoil?  The simple answer is turf and its control.  Unless the estate planning team is remarkably cooperative, each advisor has an agenda and seeks to control the client; and this battle isn’t limited to just the for-profit advisors.  Add to this volatile mix the prejudices and competing claims for attention from the client and you’ve set up some real struggles.  Where and why did this all come to pass?  It’s based on both perceptions and fact.  Rather than draw on each individual’s strengths, each group seeks to gain advantage by marginalizing the other’s skills and talents.  What should each group of advisors bring to the table and what should they leave behind?

The Charity’s Contribution

It is critically important for the development officer to communicate the importance of the institution’s charitable mission.  Until that is done and bonding has taken place, the donor has an overwhelming number of philanthropic institutions from which to choose.  If the donor has a relationship with the organization, then selling the mission is a lot easier to accomplish.  What the development officer wants from professional advisors is an entrée to the process and validation of the proposed charitable planning tools.  Besides this obvious goal, there may be another more plebian motive.  All too often, the fund raising specialist from the nonprofit knows that booking gifts and getting immediate donor support is the ticket to advancement.  Not that those motivations are unique to the nonprofit development staff, it’s a universal inspiration, but sometimes the inexperienced fundraiser recognizes that significant planned gifts are where the real money is going to be.  For every charity with in-house legal and tax planning staff, there are hundreds of not-for-profit organizations employing unsophisticated fundraisers in a planned giving scenario.  Since they often lack the technical resources to design effective estate plans, development officers turn to professional advisors to see how to catch a ride on the gravy train.  This one sided approach is short sighted and isn’t likely to produce donors happy with planned gifts.

Since wealthy donors communicate extensively with their peers and 55.5% say they recruit other philanthropists (a), it’s important to recognize how quickly both good and bad news travels in the affluent community.  Russ Prince in 1997 published a study of the philanthropic affluent in which he noted that 58% of donors were unhappy with their charitable planning as proposed by development officers.  Of course, the nonprofit planners aren’t the only ones with a low approval rating; clients were unhappy 62% of the time with their professional advisors. (b) The most common reason donors were satisfied with the planning process was the result of their advisors’ technical competence; something that both group of advisors, in a self-evaluation of needed skills, ranked last. (c)

“Propose to donors only those things that you would propose to your own father and mother.  Until a donor feels good in the bottom of his/her belly about a proposed gift, it’s not a good gift.”

Roger Ellison, Vice President for Planned Giving, West Texas Rehabilitation Center

While both nonprofit and for-profit advisors have strengths and weaknesses, in order to deal with them and form effective teams, it’s important to understand the perceptions of both groups.  From the commercial sector, the following complaints are lodged against the nonprofit quarter and, unfair or not, they need to be addressed.

Development officers are highly mobile, using their positions as stepping-stones to other opportunities.  A 1992 NCPG survey of nonprofit professionals showed that planned giving officers with less than three years’ experience made up 38% and in 1996 it was 42% (c) of respondents working in planned giving positions.  The survey changed format in 1998, and while salary shouldn’t be a measure of competence, it’s often an indication of experience.  The latest data shows that 89.8% of planned giving specialists making less than $55,000 had three years or less of experience, this represents 48.9% of the nonprofit employees surveyed. (j).  Given that positions in a planned giving office tend to attract more qualified staff, that relative lack of experience and excessive mobility makes it hard to cultivate planned giving donors who seek continuity and skill.  Further aggravation exists when professional advisors become frustrated with the need to train and explain complex concepts to an ever changing new crop of development officers that seek support, since few planned gifts are completed in less than six months and many take years to realize.

Too often, nonprofit organizations are forced to place a lower market value on their employees and, by poorly compensating them, it sets up a potential for resentment when salaries are compared to those in the commercial community.  For-profit planners often see themselves as a resource to be unfairly milked in support of the nonprofit organization or characterized as commission and fee crazed mercenaries banging on the gate who should instead forsake compensation because they work to assist donor clients in meeting charitable goals.  This inequity in compensation sets the stage for jealousy and disdain when estate planning specialists lose sight of achieving their goal of helping a client donor establish an effective charitable plan.

Development officers, in their quest for support, may provide donors with sample documents and proposals that minimize the downside or fail to fully disclose the risks of making irrevocable gifts.  They object to the for-profit advisors’ meddling in the plans and dissuading the donor from completing the gift, especially when the gift is desperately needed.  On the other hand, professional advisors may have a legal obligation to poke holes in a plan they don’t understand or agree with, no matter how deserving of support the charity is.  One of the problems of focusing on just one component of the gift is that when it’s not integrated within the entire estate plan, it may create other problems.  Since clients may not provide fundraisers with complete access to their balance sheet, the charity’s development officer is working on a plan with limited access to the big picture.  Many competent attorneys don’t want to see IRS prototype or charity-authored sample documents in client hands, especially if the development officer isn’t aware of other components in the estate plan.  They rightly object to being a rubber stamp to an already concluded process without a chance to provide proper counsel.  Besides defending the time they sell in the process, there’s a concern about a patchwork quilt approach to planning.  For some lawyers there is unease about the unauthorized practice of law (UPL) by all the planners, not properly  authorized to provide documents, involved in the process.  UPL is a serious issue that exists for many legal commentators because there may be no one to represent the interests of the donor if the charity proposes the plan, and then acts as trustee and investment manager in a turnkey type planned gift.  On the other hand, inexperienced legal advisors too often improperly rely on the development officer’s number crunching and document samples without understanding the nuances of design concerns.  Even if they do nothing but sign off on the plan, the client’s lawyer and accountant are the ones on the malpractice hook when things go sour, and it’s natural they’d have some reluctance to grant a blank check to a development officer, no matter how good their intentions are.  Commercial sector advisors are often tax driven and for them, philanthropy may not be highly motivating.  Unless they hear the client express charitable intent, they fail to see any good reason for including philanthropy in a plan at the expense of heirs and client security.  However, when charitable planning takes place, the charitable institution shouldn’t expect the advisor to stop being a donor advocate.

Why is gift planning, which theoretically ought to offer a higher level of cooperation, usually worse compared to other advisor inter-relationships?

“First, because there are not too many such gifts.  Second, the gifts are usually deferred and are not of as much interest as the ‘today’ gift that is desperately needed.  And planned gifts are seemingly complex and the not for profit folks don’t like to appear to the donor to be unable to do ‘it’ themselves.”

Richard C. Zinzer, Director of Development, University of Houston

When development officers present a plan leading towards a significant gift, they feel threatened when the professional advisor won’t assume the client is being altruistic and help close the gift without throwing up a bunch of objections.  Partly, it’s a communication problem, and partly it’s a result of prior training; you can’t expect professional advisors to change the way they do work just because there’s a charity involved in the transaction.  Building networks of competent planners who understand the planning dynamics and the client donor’s goals is critical if there’s to be any chance of success.

“Attorney’s, for example, are trained in the Socratic method – subject a decision to critical analysis by probing for weaknesses as opposed to extolling it’s virtues.” — Roger Ellison

Some nonprofit employees have little experience with or understanding of the capitalist system and have a deep-seated distrust of the wealthy and their advisors.  Because they’ve not had to run a business or deal with pressures in a market driven economy they try to appeal for support by using language that may not be motivating for potential donors.  For example, asking a business owner to help a charity because it’s tax deductible or because the support is somehow owed to the charity is a tactic with little chance of success.  Couple that inexperience with a sense that the estate tax system is a good thing designed to ensure a redistribution of wealth, and it’s possible that there’s potential for conflict between the donor and the charity’s employee.  Each donor has different “hot buttons” that generate actions, but sometimes it turns out that they’re not always positive buttons.  For the reluctant philanthropist sometimes it’s easier to motivate them when they’re upset, and the proposed philanthropy solves a problem, rather than starting as a great idea to promote good works.

Accountants, attorneys and an increasing number of financial advisors are fee-based planners with no motivation to work on plans that don’t generate billable hours.  Except for any personal sense that their guidance is promoting a common good, there’s no reward for the risk.  Development officers are generally salaried and can feel comfortable investing time by encouraging their donor prospects to consider planned gifts.  Coming from a culture that encourages low-key visits and informal get-togethers, the Planned Giving Officer (PGO) doesn’t object to spending time in meetings.  For-profit advisors, in contrast, are reluctant to spend time cultivating clients in unproductive sessions, since many times their schedules are already booked with existing clients seeking appointments and willing to pay for expertise immediately.  To learn the complexities of charitable planning, an admittedly arcane part of the law, tax and legal professionals must commit to either doing the work gratis as a learning experience or charging a fee sensitive client for the time it takes to get up to speed.  Generally, that won’t happen.  It should be no surprise that carpenters build houses of wood and masons build them with brick.  Most advisors won’t have a charitable gift on their radar screen because they’re uncomfortable with it.  They simply avoid the problem by ignoring advanced and charitable planning techniques concentrating instead on activities that pay the bills.  For a development officer to expect free technical support is unrealistic, but if they find someone gracious or committed enough to offer assistance, they’d be well advised to take care of them.

Most planners agree that establishing planned giving committees and advisor councils helps charities explore charitable options with donors.  However, a charity should not expect volunteer groups to offer advice in areas for which they’ve had little training.  A property and casualty insurance agent, a divorce or real estate lawyer and a CPA who specializes in audits all may have great skills, but those skills don’t necessarily equate with experience in planned giving beyond what they received in prior schooling.  This area has become highly specialized and is constantly changing; they should find competent help.

Client advisors are concerned about incompetent charitable planners who implement plans that are one sided, or tax inefficient.  For example, highly appreciated assets contributed to a low payout CRAT will often produce income tax deductions that are wasted, and that’s a red flag to the CPA who has to listen to a client gripe about income taxes every year.  What these gatekeepers to private wealth want to see instead is something that meets the donor’s need for income security and tax relief.  It is a split interest gift, and planners must remember that both sides should have a benefit to make this gift work properly.

Before a gift should be considered, address the priorities from the donor’s perspective first; above all, do no harm.

1. Ensure financial independence – help donors accumulate and set aside adequate resources to maintain lifestyle and address family security issues; remember life expectancies are statistical medians — 50% of donors live longer than the IRS expects them to.

2. Create a sense of family legacy – help donor clients by using the basics of estate planning to shift appropriate distributions at the appropriate times to heirs.  Involve the family and help nurture the next generation of philanthropists to strengthen family supported charity.

3. Control “social capital” by creating a community-oriented sense of legacy – help donors develop the basics of economic citizenship, even if it’s enlightened self-interest.  Philanthropy can be learned.  What makes charitable planning work is the combination of logic and an appeal to the heart and soul of the client.  To do otherwise is to shortchange clients, who deserve more than an appeal to their base instincts.  84.6% of affluent investors identify themselves as highly motivated toward philanthropy; often all the advisor needs to do is to show the donor how they can afford to give more. (a)

Donors pass through a philanthropic progression as they become more aware of the opportunities to support charitable works. (d)

1. Philanthropy means more than charity.

2. Charitable giving should be proactive rather than reactive.

3. Charitable giving should be based on a donor’s commitment.

4. Charitable giving should be viewed as an investment.

5. Effective donors invest the time.

6. Charitable giving requires a certain level of competence.

7. Charitable giving must be focused.

8. Charitable giving should be driven by the donor’s values

9. Charitable giving links a client to society.

Help client donors work through these stages by presenting concepts with which they can identify.  Address the donor’s needs and goals, allay their fears about doing something that superficially is foreign.  After all, who gives away stuff they still need?  Simple one or two page summaries are easiest to work with, while detailed ledgers that support the plan should be made available to advisors.  Not that some clients or donors shouldn’t see these masterpieces of computerized number crunching, but it should be with the caveat that the numbers ultimately will be proven to be inaccurate predictions.  Making assumptions about future performance is inherently dangerous and clients tend to have selective memory when they hear how their planned gifts will function year-to-year.  It’s better to stress the charitable nature of the gift and be conservative about making projections.

“It has been said that the most effective PGO’s genuinely believe in the cause for which they seek funds.  There is some truth in that–and evidence for it.  (You won’t find any agnostics, for example, in the development office of Brigham Young University.)  This commitment to cause cuts both ways, however.  Even as it attracts highly dedicated employees, it attracts employees who are territorial in perspective–and overly zealous.  Too often, they see professionals as ancillary staff…people to be harnessed, fed an apple or two (annual recognition dinner), and put to work in the institution’s “pasture.”  The institution is able to do this because, typically, it has strong finances and good political connections (including a high-profile board).  These traits make it highly influential in the community.  Also, of course, it gets mileage from its “charity” imprimatur.

RESULT:  Too often, professionals are not treated as partners.  The playing field is tilted, and the professionals are exploited…used as second-string players. True, they may be lauded and “plaqued” by the institution’s president, but that is much ado about showmanship.

SOLUTION:  Nonprofit gift planners should put their role in perspective.  They need to recognize that the closing of most planned gifts is a team effort, and that the contribution of every player–nonprofit, professionals, and donor–is essential for success.”

Paul Schneiter, editor Planned Gifts Counselor

The Commercial Sector Advisors

Of course, there’s plenty of responsibility for the professional community to acknowledge, and development officers are rightfully upset with some of their donors’ advisors.  Charitable planners understand that commercial planners act as speed bumps for wealthy clients, who use them as a foil to keep persistent solicitors at a distance, and few donors will complete a financial or estate plan with a significant planned or major gift without their advisors’ concurrence.  What a development officer needs more than anything is technical support and a willingness to implement the plan once the donor understands the choices, the necessity for making decisions and taking action.

Some gift planners refer to the for-profit community as “allied professionals”.  However, for clarity, the commercial sector advisors in this article will refer to accountants, trust officers, financial planners, stock brokers, attorneys, insurance and financial services advisors.  Using “allied professional” as a defining label seems to imply that the advisor has been deputized by the organization as an ancillary fundraising arm of the charity.

Unfortunately, this collection of planners falls into three general categories and too often fundraisers from a charity run into advisors who give everyone a bad name.  While there is a small group of professional advisors who see charitable planning as an integral part of their practice, there are far more in a second group using planned gifts as a product to be sold or as a fee generating service with little commitment to a charitable outcome.  Although it’s true that financial and tax advisors should be compensated for their expertise, too many push the process solely as a way to market products without a strong commitment to helping clients recognize and realize their charitable goals.  This second group may be somewhat competent and able to lead the client through some of the planning traps, but they tend to approach the charitable planning in a hit or miss fashion seeing charitable gifts only as a tax driven solution. The real problem lies with the third group, the mercenaries banging on the gate who give charities and committed charitable planners real heartburn.  This group sees a charity with a donor base that can be exploited as a pool of potential clients.  They market services under the guise of helping the charity.  This works because most charitable boards and their executive staff lack a strong financial background and see this offer as a way to fill their organizations’ coffers with enough revenue to meet their mission by handing off fundraising activities to these marketing experts.  They try to sell charitable trusts as products, pitching them to prospects as tax avoidance schemes, bordering on tax evasion.  Examples abound of abuses, and these include sales of inappropriate insurance products that take a donor’s ongoing annual support and convert those needed dollars to commissionable premiums or to those who expect kickbacks for steering a donor to a charity as a finder’s fee.   Occasionally seminars are offered with evangelical zeal, as a way to entice potential clients to disclose financial background and provide another way to market products that otherwise wouldn’t have been purchased in a more structured and stable environment.  This approach works because a clever promoter can appeal to a prospect’s greed by over promising the advantages and glossing over the mechanics and legal niceties.  These professional advisors, although that’s probably an overgenerous description, ingratiate themselves by joining boards and offering assistance as a way to acquire mailing lists and seek centers of influence. The more disreputable advisors “shop charities” to peddle their clients and try to find a nonprofit to act as a facade or a shill in a transaction, these actions may expose the nonprofit organization with sanctions and a loss of their tax-exempt status.

The trends are quite clear; some firms pursue charities legitimately, others see them as sheep to be sheared.  In 1991 it was reported that 55.7% of sampled trust banks and 44.6% of insurance companies were targeting nonprofit organizations for services and products, and by 1994 up to 95.9% of the same banks and 96.7% of the insurance companies were in on the action. (a) While there’s nothing wrong with networking and building a practice based on referrals from satisfied clients, there should be some commitment to the philanthropic mission of the charity.

Self Reported Ranking by Advisors

(1 – 4, with 1 = most important)






Interpersonal Skills
Technical Expertise
Donor’s Trust in the Gift Planner
Donor’s Trust in Organization
Gift Planner Profile 2 (c) — NCPG, 1996

What sins are visited upon charities by the donor’s advisors?  There’s a long and detailed list, but consider the following:

When advisors are unwilling or unable to acknowledge that estate planning with complicated charitable tools is a highly technical field, not practiced by many, they dig holes for their clients.  Since these are usually irrevocable gifts, when they blow up, the clients are irrevocably perturbed and some seek redress through litigation.  Instead of passing the responsibility to experienced planners, an advisor who tries to go it alone may provide incomplete or inaccurate advice that results in donor dissatisfaction with the charitable gift.  That mistake generates ill will and many of the donor’s peers may decline to make similar irrevocable gifts because of the advisor’s malpractice and lay the blame at the charity’s feet.  Of course, some advisors go too far towards the other extreme, promoting the use of complicated planned gifts because they generate larger fees than a simple plan that produces little revenue.  Sometimes the old adage, KISS (keep it simple stupid), makes sense.  For example, a CRUT proposed for a $60,000 gift, might be more complicated and expensive than justified.  A gift annuity might be a more appropriate tool to consider, even if it generates few billable hours.  Most advisors do a dainty dance around each other in an effort to avoid hard feelings, yet there’s nearly always an undercurrent of distrust, some of it is well deserved.

Advisors compensated by the charity for investment or legal advice may have wholly proper relationships, but when they seek to gain commissions and fees by representing both parties to a transaction, they cross an ethical line.  Full disclosure and due diligence requires that each side have appropriate counsel and not have conflicting interests.  The case of Martin v. The Ohio State University Foundation, Ohio App., 10th App. Distr., 2000, is illustrative of the problems that occur when an advisor tries to sell a CRT like any other financial product, and then compound the error with a poorly coordinated team of advisors.  That type of marketing plan is guaranteed to produce a donor who is dissatisfied with the charitable tool that didn’t perform as expected.  It’s better to lay out all of the risks and rewards and spend time on the mechanical issues with which the client will deal over the life of the trust.

The seven key factors satisfaction table (below) summarizes client – advisor perceptions that should be readily transferable to estate and gift planning relationships.  Since this survey was based on affluent ($5 million or more in investable assets) clients and their money managers, there are some observations that may suggest ways to establish better donor relations.  Unfortunately, clients are generally in no position to accurately gauge investment advisor competence, and that’s typical for any technical skill like estate planning.  Clients generally assume their financial advisors are competent, and while they may be satisfied with their advisors, they react badly when the planning process that depends on competence turns sour.  However, there are traits that clients can more readily judge which predict a satisfactory client – advisor relationship.  They include reliability, the ability to manage expectations, and avoiding surprises with good communications; some call this a “high touch” system of contact.  While most clients indicated that their advisors were polite, friendly and courteous, there was a real difference in perceptions of warmth and empathy.  Advisors who possessed active listening skills, and characteristics that allowed them to focus on their client’s needs and bond with them, retained their clients consistently.  Counselors without those skills lost clients.  Although it seems that educating clients with seminars would be an important way to service client needs, it was seen more as an effective way to let clients justify their faith in the advisor, validate prior actions and keep them informed.  Seminars are designed to encourage prospects to perceive the presenter as a resource, not as the primary way to educate and solicit new clients.  Client donor cultivation occurs when they seek counsel in follow up meetings where specific concerns can be addressed.

Seven Key Factors that Impact Client Satisfaction(a) Client Viewpoints
Rating the Advisor – Money Managers

Client Perceptions of Their Advisors







Competence Factor

-Keeping dealings confidential

-Having money management expertise

-Being knowledgeable in investments







Hustle Factor

-Being extremely reliable

-Being a perfectionist





No-Surprises Factor

-Wanting to know complaints

-Communicating problems and solutions





Warmth Factor

-Being responsive

-Being warm





First to Know Factor

-Providing timely information

-Giving regular client briefings





Listening Factor

-Being patient while explaining

-Listening well





Client-Centered Factor 

-Understanding specific needs

-Providing viable alternatives

-Defining client needs







What should be of great concern to prospective clients and donors is a recently released study that surveyed donors, professional advisors and planned giving officers employed by nonprofit organizations. (e) The survey results were alarming, disappointing and surprising.  In short, assuming advisors possessed minimal competence and technical expertise turned out to be a mistake.  Advisors who claimed planned giving as a major part of their practice generally lacked the training to properly advise their clients.  A pop quiz with randomly generated estate planning and planned gifting questions produced no professional group with an average passing grade (above 70% correct).  Although attorneys specializing in estate planning had the best scores, fund-raising employees of charities produced the worst scores.  What this means is that continuing education needs to be an ongoing requirement and different levels of training need to be available for all those who make financial planning, estate planning and planned giving a part of their practices.  Unfortunately, too few professionals make an effort to stay current, much less on the cutting edge.

Understand that tax driven planning is important to professional advisors, but it’s not the principal reason donors make planned gifts in support of a charity.  Tax planners tend to take a narrow view of the planning options and are less likely to suggest making charitable gifts out of a concern for exerting undue influence on the client.  Some advisors especially avoid introducing the topic out of a fear of losing the client’s trust and business. (b) However, this attitude tends to minimize the opportunity to distribute just wealth to heirs, there’s also a chance to pass down the client’s value system.  Planned gifts are just that, philanthropic gifts, and in a purely analytical evaluation of that gift, it’s possible that the donor will be better off financially.  However, those gifts oftentimes come at the expense of passing those assets to family heirs.  While it’s possible and generally a great idea to set up a win-win situation, remember intangible benefits accrue to a donor by making a gift.  This emotional feedback can’t be quantified and shouldn’t be marginalized.  To help donor clients manage expectations it’s even more important to elicit charitable intent and help clients understand their opportunities to support projects and organizations with special meaning to them.

Issues that present problems for professional advisors dealing with the fallout inexperienced development officers create are numerous, but donor cultivation tops the list.  Who’s to blame?  “Fund raisers who do not have a clue how to build the relationship with their donors first before going in with a big proposal. Gifts that can transform an institution come from a deep involvement by the donor in the life of the charity and when the time is right, the gift will happen.  Fund raisers who have the attitude that the donors owe them a gift because they have so much money. Inexperienced planned giving officers who expect qualified donor advisors to include them in discussions when it only takes one conversation with the fund raiser to know that the person has very little sophistication on these complex topics. A lot of inexperienced people are trying to do planned giving, and it is scary.”

Debra Ashton, Ashton Associates

The Client

Motivations of the Charitably Affluent(g)
Communitarians – desire to help the local community 26.3%
The Devout – compelled by religious convictions 20.9%
Investors – incorporate a financial component in their decisions 15.3%
Socialites – decisions based on their social milieu 10.8%
Repayers – a sense of fulfilling a perceived obligation 10.2%
Altruists – means of self-fulfillment  9.0%
Dynasts – a function of socialization and family heritage 10.3%

Legal and financial advisors appear to play a much more significant role in the gift planning process than they did in the 1992 survey. This may be attributed in part to the increasing affluence and financial sophistication of donors in a strong economy.  However, the desire to support charity remains the primary motivation for most donors, while tax and other financial considerations continue to be secondary. (k)

From The Millionaire Next Door, consider the following facts uncovered about American millionaires:

  • Only 19 percent receive any income or wealth of any kind from a trust fund or an estate.
  • Fewer than 20 percent inherited 10 percent or more of their wealth.
  • More than half never received as much as $1 in inheritance.
  • Fewer than 25 percent ever received “an act of kindness” of $10,000 or more from their parents, grandparents, or other relatives.
  • Ninety-one percent never received, as a gift, as much as $1 of the ownership of a family business.
  • Nearly half never received any college tuition from their parents or other relatives.
  • Fewer than 10 percent believe they will ever receive an inheritance in the future.
  • By 2005, there will be 5.6 million households with a net worth of over $1 million.
  • By 2005, the total value of private wealth is projected to be $27.7 trillion.
  • 5.3 % of the households will control $16.3 trillion of this money.
  • 2/3 of the millionaires are self-employed.
  • 80% of millionaires are first generation.
  • “America continues to hold great prospects for those who wish to accumulate wealth in one generation. In fact, America has always been a land of opportunity for those who believe in the fluid nature of our nation’s social system and economy.          More than one hundred years ago, the same was true. In The American Economy, Stanley Lebergott reviews a study conducted in 1892 of the 4,047 American millionaires. He reports that 84 percent “were nouveau riche, having reached the top without the benefit of inherited wealth.” (f)

With all of their advisors offering conflicting, confusing and poorly coordinated advice, it’s no wonder that clients feel whipsawed and that curmudgeon-like traits pop to the surface.  No one likes to feel out of control and when presented with no clear choices, the client withdraws and postpones future decisions.

“I have been dreading this for so long, and have put it off for years.   After I realized what choices I had and how I could make a difference, it became much easier to do.  Getting together with a team of planners who took the time to help me made it all a wonderful experience and I’ve had a lot of fun working with this.”

— 85 year-old widow commenting on the success of a family meeting discussing her estate plan

Given the human frailties that must be dealt with, there will need to be some compromise on all sides.  Donor clients need to acknowledge that there are no magical solutions to simply solve problems that accumulated over a lifetime of acquiring and conserving wealth.  Add to that a burden for dealing with longstanding intra-family squabbles and there’s a volatile mix headed down a rocky road.  If the advisors are providing conflicting advice and clients can’t differentiate between the technical nuances, how can anyone reasonably expect to get a sensible decision?  It’s far better for the advisors to elicit and acknowledge the client’s priorities.  Then in a cooperative fashion build a plan that meets those goals.  An estate plan is much like the construction of a house, each contractor contributes something to the finished project, framing, plumbing, electrical, roofing and finish work; all use different skills, tools and training and all are important if the house is to function properly.  It’s no different with estate planning professionals.

 What Donors Want in Their Charitable Advisors Charity




Expertise in technical details of executing gift 16.0% 97.9%
Skill and efficiency working with other advisors 60.3% 75.2%
Willingness to let donor set the pace 67.2% 86.0%
Knowledgeable about each type of planned gift 94.7% 99.4%
Sophisticated understanding of donor’s motives 99.2% 82.2%
Help in deciding what type of planned gift 85.5% 96.8%
Effectiveness in getting charity to treat donor as he or she wants to be treated 69.5% 11.2%
Technical sophistication was a defining characteristic in developing positive experiences.  Donors in this survey had previously made planned gifts worth at least $75,000 and had a net worth of $5 million or more. 603 donors surveyed  (h)

“Leaving children wealth is like leaving them a case of psychological cancer.”

James E. Rogers, JD LLM


What solutions exist?  Better cooperation and an understanding of the role each advisor plays in the planning and implementing of a well-designed estate plan are essential.  Education of advisors, on both sides of the table, is critical, and although it takes a commitment of time and effort to teach clients and other advisors, in the long run it will produce a team better able to satisfy the planning needs of a client.   Before effective teaching can occur, there must be an open dialogue and a measure of trust between all the parties before any long-term success will be achieved.  Acknowledge that any discussion of death and taxes is hardly a topic enthusiastically addressed by most clients, so make the benefits more immediately realized.  Promote a sense of control by helping clients redirect assets to heirs and projects of importance in ways that provide tangible positive feedback   A successful planning strategy should provide a sense of relief, better yet – a sense of accomplishment.

The “Three C’s of Charitable Estate Planning (i) will summarize the approach needed.  Create Philanthropists, Client Centered, and Client Commitment all combined in one values driven plan make the process different from generic estate and financial planning.

In order for clients, professional advisors and nonprofit planners to be successful, they need to collaborate.  They can do that a number of ways, as follows.

  • Promote planning partnerships, and minimize the tendency to develop an “us against them” attitude.  It’s just too easy to denigrate the other professions when you haven’t had a chance to walk in their shoes. Offer continuing education programs, workshops and joint presentations as a way to both update planners and bridge gaps.
  • Find collegial partners and establish strategic alliances, seek advisors with objectivity and creativity.  If there’s going to being any sort of sharing beyond a superficial level, have an open-minded discussion that deals with more than just technical issues.
  • Build a library of articles, case studies, web sites and resources suitable for clients, development staff and professional advisors as they start basic research on planning tools and opportunities.
  • Attend regional and national conferences on gift and estate planning.  Even if the topics are technical, and beyond a basic level of understanding, go and stretch capabilities or learning won’t happen.
  • Join estate planning and planned giving councils, network with other advisors.  Professional groups need speakers, present programs to promote charitable and estate planning concepts.
  • Understand client inertia; for many there are but two choices, do something or do nothing.  Doing nothing is perceived as having less risk.
  • Participate in Internet discussion forums; it’s a great opportunity to watch traffic among planners with different perspectives.  Even if there’s no agreement on a discussion point, just observing the dialogue provides a sense of what concerns each group of planners and clients.  The problem with the Internet is that too often there’s too much information to wade through without being able to discern who’s competent and what authority they have for comments made during those free wheeling discussions.  Besides trying to drink from an “information fire hose”, computerization now provides sophisticated software that eliminates many professionals as advisors, but doesn’t provide the discriminating experience that goes along with the solutions provided by generic software.  Look at Quicken® or Quick Books® as an example, by using that software the accounting functions for individuals and small businesses may have been taken over by those with data entry experience, but no accounting or tax background.  Is it a better solution? Maybe, maybe not.  Do it yourself brain surgery may appeal to some, but not all clients need that level of commitment.
  • Use the Internet to establish virtual communities and create networks of other advisors who face similar challenges.  The Internet has replaced the water cooler as a gathering place for exchanging ideas and proposing solutions.  So many planning shops are staffed with less than three professionals that it’s common for people to become insular in their thinking.  Once the advisor slips into that rut, there’s little in the way of creative planning to motivate new approaches to old problems unless there’s someone to stretch and challenge existing perceptions.

If client donors and their advisors are to have successful relationships, it will take trust, collaboration and empathy.  Consensus building, rather than using dictatorial pronouncements, is the more effective way to build a solid foundation.  Until all of the advisors are telling the client donor the same story and working towards the same goal, clients can’t be encouraged to make appropriate decisions.  That skill set can be learned by advisors if they’re willing to consider adding a values oriented component to their discussions and presentations.

(a) Cultivating the Affluent – How to Segment and Service the High Net Worth Market, Russ Alan Prince and Karen Maru File, Institutional Investor Inc., 1995

(b) Doing Well by Doing Good – Improving Client Service, Increasing Philanthropic Capital: The Legal and Financial Advisor’s Role, The Philanthropic Initiative, 2000

(c) Gift Planner Profile 2, National Committee on Planned Giving, 1996

(d) The Advisor’s Role In Philanthropy: A New Direction, H. Peter Karoff, Trust & Estates, April 1994

(e) “Forging Ties to the Money Pros”, Chronicle of Philanthropy, Holly Hall, August 7, 1997

(f) The Millionaire Next Door, Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D., 1996

(g) The Seven Faces of Philanthropy, Russ Alan Prince, Jossey-Bass, 1994

(h) Prince & Associates and Private Wealth Consultants, 1997

(i) The Charitable Estate Planning Process – How to Find and Work With the Philanthropic Affluent, Prince, McBride and File, 1994

(j) Gift Planner Profile 3, National Committee on Planned Giving, 1998

(k) Survey of Donors 2000, National Committee on Planed Giving, 2000

There are practical resources for advisors working in the trenches; check these for help.

Planned Giving Design Center (

Gift Law (

Council on Foundations (

Leave A Legacy ™ – National Committee on Planed Giving (

Other publications worth a review if added background is needed.

Cultivating the Affluent II – Leveraging High Net Worth Client and Advisor Relationships, Russ Alan Prince and Karen Maru File, Institutional Investor Inc., 1997

Private Wealth – Insights into the High Net Worth Market, Russ Alan Prince, Institutional Investor Inc., 1999

The Charitable Giving Handbook, Prince, Rathbun and Steiner, National Underwriter, 1997

© 2001 Vaughn W. Henry

see the final article in the Journal of Practical Estate Planning,, Published Bimonthly by CCH Incorporated, April-May 2001 Issue – page 30 – 41.