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2012

Finding common ground: Planned Giving Officers & Financial Advisors . Presented by:. William Sutton, Jr. Head of Philanthropic Services, US UBS. 2012. Section One. Why are Financials Service Firms “Into” Philanthropy. The Business of Philanthropic Services. 90. 53. 6. percent.

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2012

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  1. Finding common ground: Planned Giving Officers & Financial Advisors Presented by: William Sutton, Jr. Head of Philanthropic Services, US UBS 2012

  2. Section One Why are Financials Service Firms “Into” Philanthropy

  3. The Business of Philanthropic Services 90 53 6 percent percent Trillion 98% 98% Advice Of clients give annually Philanthropy is a top client priority ? No consistent source Why are Financial Services Firms “in” philanthropy Wealth Transfer Designate Advisor Change Firms Evolving client needs… …firms are moving beyond investment advice

  4. Endowment & Foundation Services – The Opportunity Endowment & Foundation assets in the US U.S. Market Opportunity • $2.56 Trillion AUM and over 1,000,000 public charities • 64% of HNW clients serve on non-profit boards Business Opportunity

  5. Focus on more than asset management

  6. UBS Philanthropic Services: a global presence We provide you with expertise and solutions to deliver positive change Philanthropic Team UBS commitment to philanthropy goes back many years. Our team covers over 30 dedicated experts globally and we look back at over 10 years of successful hands-on experience with our in-house foundation, engaging in over 70 countries worldwide. Paris Zurich / Geneva New York Atlanta Hong Kong Singapore Headquarters 6 regional offices Projects & InitiativesUBS Optimus Foundation Sydney

  7. 1 UBS Philanthropic Services: A Local and Global Presence Providing unique knowledge exchange, administration investment and peer-share services UBS Philanthropic Services: • Works with over 20,000 charities across the U.S. and thousands more globally1 • Serves 3,500 private foundations in the U.S. • Selected Best Global Philanthropy Services2 • Over $50 Billion Managed and Advised Philanthropic Assets in the U.S. alone • Services for private foundations, donor advised funds, charitable trusts, endowments and foundations Recent UBS Philanthropy Events: • UBS Global Philanthropic Forums and Roundtables • UBS Optimus Foundation • Next Generation: Philanthropy – Singapore, Zurich and New York • Visionaris Social Entrepreneurship Award in Latin America: UBS & Ashoka • UBS US Philanthropic Roundtables • Q Series on Sustainable Investing • Mission Related Investing Roundtables • Family Office Forum • Coaching Roundtables: Customized training and peer sessions for Endowment and Foundation Leadership Best Philanthropy Services in the World Euromoney 2012 1 National Center for Charitable Statistics 2Euromoney Private Banking Survey, 2012for the year 2011

  8. Benefits of Charitable Planning Charitable planning brings life to client’s values and supports the community, and also benefits financial advisors Uncover more assets- Assessing a client’s charitable goals may uncover assets held away Increase revenue- Charitable planning may lead to solutions such as life insurance, donor advised funds and trust services Build relationships across - Conversations may lead to relationships with client’s heirs and their multiple generations friends who share their causes Develop strong referral - Establish productive relationships with your client’s other advisors sources Insulate your client - Addressing charitable planning positions you to maintain control and relationships coordination over all aspects of your client’s financial life - Successfully helping clients address some of their most personal needs enhances their trust and confidence in you Source: UBS; From Planning to Action, Delivering Wealth Management Advice – Charitable Planning; 2012

  9. Why are financial Services firms “in” Philanthropy The Lucky 9% Talk About Planning Real Conversations The Lucky 9% Active Philanthropy

  10. Section Two The Landscape

  11. The Landscape Recent Charitable Trends • Research - History • 1990s: TPI’s series of professional advisor surveys • Financial Advisor philanthropic dialogue with clients: • intermittent • focused on estate planning not philanthropy goals • In 1999, Schervish and Havens document $41 trillion intergenerational asset shift • By 2004, TPI reflects shift in advisor practices on talking about philanthropy with clients • 80% discussed philanthropy with clients • 38% said “very important” • 75% said “good for business” • 8% reported such discussions “generated revenue” 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  12. Philanthropic Landscape:Recent History: Americans donated $298 Billion in 2011 Giving USA Foundation 2008

  13. Section Three The Pew Charitable Trust Survey of Financial Advisors

  14. What are the top three concerns of your existing client base? Insight Transferring wealth effectively and efficiently (i.e., multigenerational planning) Tax minimization • Outliving assets and not having enough for retirement • Volatile markets (i.e., short-term market problems and the economy) Philanthropic effectiveness Bringing children into the family’s philanthropy Asset preservation Teaching heirs to use wealth responsibly

  15. What is the greatest challenge to addressing your client’s philanthropic needs? Recent Charitable Trends • What do advisor’s need? • Lack of advisor expertise in philanthropic planning: “I need to learn the topic more.” • Financial insecurity: “Market conditions have clients concerned that they will not have enough to support family needs over the long term.” • Lack of company-provided product: “My company does not have a donor-advised fund.” • Lack of client direction: “Most people have a vague idea of being charitable, but no clue what they really want to do.” • One advisor was clear that training was needed on the “softer skills.” 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  16. Addressing your client’s philanthropic needs Recent Charitable Trends 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  17. Survey Takeaway: Amplifying the Philanthropic Dialogue Recent Charitable Trends 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  18. Section Four Practical Opportunities

  19. Selective Partnership Recent Charitable Trends • The “Right” Advisor • 10 plus years in the business • Serves on nonprofit boards • Practices “holistic wealth management” • Embraces financial planning • Open to partnership • They talk to (not through) the spouse/partner • They know which charities their clients support and why • Philanthropic Financial Planning 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  20. Understanding the Advisor Recent Charitable Trends • Compensation and Competition: friction and frank conversations • Commission/Salary Bonus or Recognition • Donations, Wills and Trusts: Assets leave the firm • Overpromising Development Director • “Why would I ever introduce you to my best client” • It’s not you, it’s me 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  21. Understanding the Advisor, cont. Recent Charitable Trends • Hurdles to charitable planning • Advisor and Comfort Discomfort • Perceived client disinterest • Speaking to the wrong client • Infrequent meetings/limited time • Short term relationships • Conflict avoidance: transactional planning is easier • Lack of competence 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  22. You might need to adapt Recent Charitable Trends • Avoiding Friction and the new reality • Donor/Client life events vs. nonprofit fundraising schedule • Bequests: Discuss with Advisors • Client and Advisor “control” – assets managed • Commercial Donor Advised Funds: Fidelity, Calvert/Impact, UBS, Comerica • Community Foundations: KC and Atlanta • Restricted endowment assets 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  23. Philanthropic Conversation Charitable Giving: Who starts the conversation? Client Initiated Advisor Initiated

  24. Philanthropic Planning Nonprofit assistance: Help close the 80/20 gap Financial Advisors Marketing materials: tools for effective giving w/o overselling Include advisors in annual meetings to learn about mission plus educational updates re charitable planning Educational workshops Active Philanthropy Concrete illustrations of donor success Issue based information about community needs and how effective local nonprofits are at addressing needs

  25. Opportunities Recent Charitable Trends • Understanding the win-win • Educating the Financial Advisor • Serving as the expert resource for the advisors’ clients 1 Andrew Hastings “2011 Donor-Advised Fund Report”, National Philanthropic Trust. http://www.nptrust.org/images/uploads/2011%20Donor-Advised-Fund-Report%281%29.pdf 2 McAllister, Brian P and Timothy R. Yoder “Closing Up Shop: How to Successfully Shut Down a Private Foundation”

  26. Section Five Continued Discussion

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