Professional advisors are key

What an opportunity we have ahead of us and professional advisors are key

Eleanor Cater
Community Foundations of New Zealand
3 September 2018

Professional advisors are often surprised to discover how many people get great fulfillment from personal giving.

Gone are the days where giving to charity exclusively means dropping money in a bucket or sponsoring a child. There many options today that allow people to consider structuring their giving to causes that they care about in a more strategic, a more fulfilling way. Knowing what these options are can lead to very meaningful lawyer-client conversations.

Lawyer Bill Holland, who founded the Acorn Foundation in Tauranga in 2003, often says that meaningful conversations about giving or philanthropy can add significant value to lawyer-client relationships. He says that many clients do want to have a warm conversation about their interests and their passions and certainly do want to have a meaningful conversation that goes beyond the technical.

We are certainly seeing in New Zealand more people discovering that they can give back to their communities in a myriad of ways. Once people know their options we find that the giving strategically can be a very appealing prospect.

Conversations on giving are particularly important today as we are poised to see an unprecedented intergenerational wealth transfer from the baby boomer generation about to take place. According to Philanthropy New Zealand the intergenerational wealth transfer in Australia and New Zealand will likely exceed $600 billion over the next 20 years.

What a difference it could make if we can channel a portion of the baby boomer wealth towards philanthropy. Put into effective and professionally managed funds  it could be transformational in communities and change the charity landscape of New Zealand forever.

The Research

Studies from Canada indicate that 76% of clients agree that discussing philanthropy with their advisor strengthens the relationship. 2013 American research has also revealed that such philanthropic conversations would likely improve the client-advisor relationship and strengthen future business opportunities. A 2016 UK study found that the estate-making process can reliably shape whether people leave assets to charity in their Will; yet a 2015 QUT Survey found that only 1/3 of advisors discuss philanthropic issues with their clients. There’s a big opportunity here.

What are the options for giving?

Options for giving are many, varied and can be tailored to an individual’s needs and desires.  Knowing the difference in types of giving can be a real eye-opener and many people are delighted to discover that there are more strategic ways beyond traditional charitable giving.

For example, establishing an endowment fund is like having your own charitable Trust without all the hassle. It enables clients to focus on their giving and the causes that they care about and it enables them to give for the long-term. In fact it enables them to go on giving to causes that they care about forever. It’s transformational, it’s impactful and its reach is so much greater than traditional charity giving.

 

There’s a whole section on this website dedicated to information for professional advisors. You could share it with a lawyer, accountant or financial advisor you know; it could lead to something quite fufilling and, potentially, something quite transformational in the community where your heart resides.

 

See further details in the article ‘Adding Significant Value to Client Relationships‘ in the September 2018 Edition of the NZ Law Society’s Lawtalk magazine.

Now is the time

Now is the time

By Liz Koh, 
Deputy Chair, Nikau Foundation 
4 October 2017

Baby boomers are not only getting older – they are getting wealthier. As they reach retirement age, they bring along with them a tsunami of wealth that needs to be invested, spent, and finally bequeathed to their heirs or charity.

Marketers talk of the ‘grey dollar’ – the money that will be spent by aging affluent baby boomers over the next 20 or 30 years.

All over the world, businesses are looking at ways to tap into this lucrative market. In Japan, there are shopping centres designed for the elderly, with medical clinics, pension-day discounts, and leisure activities for retirees. From cars to retirement villages to food and beverages, a raft of products designed with the elderly in mind is coming to market.

What will baby boomers do with their wealth? The decisions they make about how quickly to use up their retirement capital, and where to invest the capital they retain, could have a significant influence on financial markets.

Of course, not all baby boomers are individually wealthy. Their influence in the market comes simply from the fact that there are so many of them.

One interesting aspect of the baby boomer phenomenon is the influence of gender. Not only do women live longer than men but overseas research shows that women are the key decision-makers in around 85 per cent of all consumer purchases. They also wield the greatest influence when it comes to charitable giving.

As this population bubble reaches the age when they can afford to be generous and when they will have to make decisions about what happens to their estates, women will play a key role.

Numerous studies in the UK and the US show that women are more likely to give – and give more – than men. One internationally recognised centre of excellence for this research is the Women’s Philanthropy Institute which is part of the Lilly Family School of Philanthropy at Indiana University.

Their research has shown that baby boomer and older women gave 89 per cent more to charity than men of the same age and that women in the top 25 per cent income bracket gave 156 per cent more than men in the same bracket.

Charities can expect a huge influx of money as baby boomers unload their wealth either during retirement or on death. The smart ones will be actively cultivating relationships with baby boomers to tap into their generosity, and women, particularly women in high income brackets, should be right in their sights.

To that end, the Auckland Foundation, a member of Community Foundations of New Zealand, is launching an Auckland Women’s Fund, which aims to support women’s giving and improve the lives of girls and women through its granting.

No doubt others will follow. After all, baby boomers have only three choices with their wealth – they can spend it themselves, leave it to their family, or give it to charity or community. They certainly can’t take it with them.

 

* Liz Koh is Deputy Chair of Nikau Foundation, an authorised financial adviser and author of Your Money Personality; Unlock the Secret to a Rich and Happy Life, Awa Press.