While motivations for giving may vary, philanthropy is a crucial component of strategic wealth management planning in coordination with other family goals and objectives.

We begin the process by sitting down with each family listening and helping them determine, develop goals and objectives for their philanthropic endeavors. While some families prefer to be “checkbook philanthropists” who give on an ad hoc basis as opportunities present themselves, the majority of families prefer to set formalized processes for reasons other than tax and intergenerational planning such as a means for bettering the community and establishing a public identity for their family.

Once we have developed the true nature of the family’s philanthropic interests, we then create an Investment Policy Statement that embodies the family mission statement, the goals and objectives, the spending and gifting policies as well as core values that will act as a roadmap for the future of the family gifting program.

The second step is to review the various structures and techniques we can implement to achieve the family’s stated goals and decide which structures are most appropriate under the circumstances. The various structures include outright gifts, donor advised funds, charitable gift annuities, community foundations, private foundations, and charitable remainder and lead trusts. The complete analysis and assessment of which structure is best suited and most responsive to the family’s core interests and concerns depends on the wishes of each family, the nature of the assets that will be used to fund the charitable structure, the timing of the gifting and intergenerational family issues.

Once all the legal and tax aspects have been explored, analyzed, and outlined, it is then necessary to design and implement the appropriate vehicle that acknowledges and addresses the desired level of involvement the family wants to have in participating in the philanthropic endeavors, and incorporates the interests, expertise, and desires of the individual family members. Here, we first determine whether the family wants to take an entrepreneurial approach to gifting or whether the family members are too busy to get involved with the day to day operations and prefer to delegate all of the duties to expert intermediaries. Additionally, we coordinate family governance policies to determine and facilitate decision making function for each member of the family and facilitate family philanthropic meetings where important decisions will be made.

The implementation process also includes educating the families on the different organizations that could be recipient of the family philanthropy. If the family does not have any particular organization or a specific cause in mind, we will help the family develop a recipient selection process. This will involve conducting due diligence on all potential donation recipients and determining an optimal spending and timing policy to fully leverage gifting to achieve philanthropic goals.

Lastly, we implement a multi-step Fiduciary Best Practices Process which is intended to provide the philanthropy with a solid framework for a disciplined investment process that includes devising a strategic asset allocation model based on the risk and return parameters determined by the family to be most appropriate to meet the philanthropy’s needs and objectives. Ongoing portfolio review includes monitoring and rebalancing investment options, compliance and risk management oversight, customized administrative and financial reporting, fiduciary education, planning and guidance for all family members.

While philanthropic planning can be quite intricate and involved, the professionals at Twin focus are here to assist our families in successfully achieving their philanthropic dreams in the most prudent and cost-effective manner.