November 12, 2013
High-net-worth investors and their financial advisors are not looking at the benefits of charitable donation in the same way, according to a study by U.S. Trust and The Philanthropic Initiative. While wealthy donors consider the tax benefits of contributing to charitable organizations when planning their financial goals, reducing their tax liability is not the motivating factor.
The study found that while 88 percent of advisors feel philanthropic discussions are important to have with their clients, only 47 percent of the clients thought advisors were good at discussing personal charitable goals. Advisors tend to the raise the question of philanthropy from technical perspectives, focusing on tax consideration and other financial benefits to the client.
However, high-net-worth individuals are not as concerned with the technical perspectives as their advisors believe them to be. When asked if tax benefits were a motivating factor for giving, 46 percent of financial advisors responded that they believed it was. Only 10 percent of wealthy individuals felt the same way about their giving. The study suggests that charity is a very personal experience for many investors and they want to know that their money is making a difference to the organization that is receiving it.
What's the message for nonprofits?
While it's uplifting to hear that receiving a tax break is not the primary thing influencing people to donate, nonprofits can get more than a warm and fuzzy feeling from the study's results. Wealthy investors that are not motivated by tax breaks are likely more apt to be concerned with how their donations are being utilized. Regardless of the cause a nonprofit serves, it is rarely the only organization contributing to it.
To make their organization more appealing, nonprofit leaders should make sure that their finances are in order and the group is able to focus on its mission. Enlisting the help of financial consultants to help navigate complexities such as unemployment insurance, fundraising and fraud protection can make a nonprofit more appealing. Nonprofit groups that are working to save money and focusing on the goals of the organization may seem like the better choice when a wealthy individual is looking to make a financial contribution.
Content presented by First Nonprofit Group, a leading provider of financial consulting services for 501(c)(3) nonprofit employers.
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Working with Marshal Whittey at First Nonprofit has been a great experience. He handles our request as a priority and goes above and beyond to resolve any issues we have in a timely manner. Marshall follows through to the end and ensures our needs are met. He has been a great resource for LSC and our “go to” for any tax questions we may have. With LSC transitioning several facilities into one federal tax identification number, First Nonprofit was able to assist and provide guidance with best practices resolving claims to each entity. Additionally First Nonprofit provided knowledge (information materials) and one on one training to HRS group with best practices to handle claims state adjudicated, fraudulent claims, and appeals. And processing information in the First Nonprofit [unemployment claims] system allows for timely information can be collected.
My experience with FNP has been wonderful. Unemployment in general is quite confusing and FNP has simplified the process for us. Everyone we have reached out to or worked with has been very helpful and follows up to be sure we understand the information. I am so happy we made the switch to FNP!
First Nonprofit smoothed the unemployment perils for our organization during Covid. Without the ability to cap our UI exposure, we would not have been able to weather the storm. The program worked perfectly and we have come out of the pandemic ready to forge on. Thanks FNP!
My experience with the FNP has been fantastic. The idea of setting funds aside for the unemployment tax liability is a bedrock for nonprofit organizations like mine, namely ASHBA; what is even more advantageous is having the FNP as a custodian of those funds. 100% recommended!
I would like to comment on my experience with FNP….to date our District has saved $1,000’s of dollars by being enrolled in the First Nonprofit program. My only regret is that we did not know about this method of paying unemployment tax years ago….as I had figured about five years
ago, had we enrolled 15-20 years ago, we could have saved our small school district upwards of $500,000 in payments to IDES. Also we would have had a pretty hefty sum of money in our Reserve Account. Thankfully I attended a workshop hosted by First Nonprofit back in 2015 which got the ball rolling!
I have worked with the First Non-Profit Team for many years, and I appreciate the quick response and care that Cecilia and the team provides anytime I have questions. While there are other providers that may provide like services, First Nonprofit will always be my first choice! I appreciate you!
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Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!