Enter Your Donor’s Financial Advisor

Focusing on Your Donor's Financial Advisor

Times are changing

When a donor is ready to make a planned gift, they usually consult advisors. Deciding to make a large contribution to a nonprofit is a big deal and not something to take lightly. Since your donor’s financial advisors not only serve your donor but connect with other prospects as well, an advisor-centric approach makes good sense for nonprofits.

By connecting with the financial advisor, the fundraiser can begin to ask important questions to make the arrangement work. For example, a charity may have specific advisor resources and programs that the advisor can avail of. 

The next step takes you in front of the donor’s financial advisor themself. Your challenge is to make your nonprofit stand out, in spite of the fact that many advisors already have in-house planned giving resources, may sit on the boards of charities, and may already have been plied with various planned giving resources by other fundraisers. 

Solution? Find a way to make a unique, solid connection so you are memorable. One way you can do this is by focusing on the financial advisor’s more important and unmet business development needs. Ask yourself, and explain to the advisor, how you can help them retain and grow their assets under management (known as AUM – the most used acronym in an advisor’s vocabulary)? 

How Much Should You Focus on Your Donor’s Financial Advisor? Here’s the Deal

Savvy charities and community foundations are beginning to understand that an advisor-centric approach is beneficial to their efforts. By offering advisor-managed donor-advised funds and endowments, they can reap the benefits of this arrangement with the least amount of stress.

Basically, these charities have figured out that not only is it not their job to invest and manage their financial assets; but they also could greatly accelerate the growth of these funds if they simply allow the donor’s financial advisor to continue to manage the assets the donor has given.

That’s how you ensure that the financial advisor doesn’t become your in-house “gift prevention department.” In fact, quite the contrary: involved advisors often introduce new clients to advisor-centric nonprofits!

Wait a Minute.

Doesn’t the charity have to open its own account with the financial advisor, so that the donor can transfer their gift from their account to the nonprofit’s account? Yes.

So if the charity has 100 donors in 50 states and each donor has their own advisor, the charity would need to consider opening 100 investment accounts in 50 states? 


Do you call that “being savvy”?! Yes! 

Just look how some advisor-centric charities handle it during these times:

  • One way is to outsource the administration work to a third-party administration company – like the Charitable Trust Administration Company (CTAC) – with the infrastructure and resources to administer the fund program.
  • Another way is to affiliate with a non-competitive charity that already operates such an advisor-centric program. Having most of the donor’s gift, or a generous percentage of the gift, is better than no gift at all. That’s why some charitable organizations, churches, and even donors who sit on the boards of other charities, have affiliated with Convoy of Hope, for example. 

Keep in mind that the seemingly obvious choices to approach for administration outsourcing, like community foundations, banks, and investment companies are often unable to accept the administration responsibilities without taking on the management of the investment, too — which defeats the purpose of being advisor-centric!

How Do I Start?

First, consider revising your gift acceptance policies to allow Registered Investment Advisors (RIAs) to manage your donor-advised funds and endowment funds. Next:

  • Design and create the administration infrastructure, or
  • Choose to outsource this administration to a third party, or
  • Affiliate with a charity that already operates such a program.


Once the program is established, investment accounts will be able to be opened with each participating RIA who is managing donor investments.

Any Other Tips on Dealing with My Donor’s Financial Advisor?

Some enterprising charities have developed a Memorandum of Understanding between themselves and their donor’s financial advisor. Such a memorandum includes the following provisions to encourage the success and growth of their funds:

  1. The Registered Investment Advisor (RIA) has current clients, who together, intend to make a $50,000 irrevocable charitable gift of property, to ABC Charity Permanent Endowment Fund, which is acceptable under Charity’s current Gift Acceptance Policies.
  2. The RIA will work to grow the endowment fund assets, under his or her management, to $1,000,000 within 3 years from the date of this Memorandum.

Forward-thinking fundraisers know that working on forming a network that includes financial advisors know that they will benefit for years to come. Forming relationships with people who can point prospective donors in your direction helps pave the way for future success. 

Now is the time to reach out – for your sake, and theirs.

Categories: Giving, Planned Giving for Financial Advisors

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