CLEVELAND, Sept. 18, 2019 /PRNewswire/ -- Key Private Bank released the results of its latest advisor poll, which explored the key triggers for giving, including differences in opinion among parents and children; the biggest challenges clients face and common philanthropy mistakes; and steps clients are taking to measure the impact of their donations.
Key Private Bank, the wealth management arm of KeyCorp (NYSE: KEY) surveyed nearly 130 of its client-facing advisors about their experiences working with high-net-worth (HNW) individuals on philanthropy.
Lack of Family Conversations About Philanthropy Fuels Differences of Opinion
Most parents are not discussing philanthropy with their children—or agreeing with them on charitable causes:
Eight in ten (82%) advisors say only "some" or "hardly any" clients involve the next generation in family philanthropy.
Environmental/Sustainability causes receive the most amount of support from children (59%) and the least amount of support from parents (3%).
Religious-/faith-based causes receive the most amount of support from parents (73%) and the least amount of support from children (3%)—representing the largest divide between parents and children.
More than half of advisors (57%) say the generational differences seen in philanthropy strategy stem from a lack of conversation and/or participation in giving discussions among parents and children.
Additionally, one third of advisors (33%) cite lack of child involvement in giving conversations, while one fourth (25%) point to a lack of parent transparency around giving strategy.
"Nearly half of advisors say the biggest mistake they've seen among clients is not factoring philanthropy into their overall estate and legacy plans," said Anne Marie Levin, National Director of Family Wealth Legacy Planning Services at Key Private Bank. "There's a clear opportunity for parents and children to overcome generational differences and work together to find common ground and set a family mission for giving. These conversations should center how families can get on the same page."
Doing Good or Doing Well?
Doing good in the world is a top priority for clients. The poll found:
Two-thirds (66%) of advisors saying clients are motivated to donate to philanthropic causes by a desire to make the world a better place
One-third (34%) feel morally or ethically obligated to repay the people and institutions who contributed to their success (32%).
Without an income tax benefit, however, three in four (75%) advisors say clients are more likely to keep their donating approach the same.
The top triggers for giving are personal in nature, such as aging clients getting their estate in order (41%) or a family health crisis (31%), as opposed to world events, like humanitarian crises (5%) and disease outbreaks (1%). To add, clients favor local causes (71%) that hit close to home, over strictly national causes (2%). Over the last year, advisors have seen more HNW investors directing one-time donations to organizations (49%).
"For high net worth families, the best investment strategies go beyond protecting wealth―they protect clients' values. Because giving can be so personal, the more thoughtful the philanthropy strategy, the more impactful the dollars will be," said Karen Arth, National Director of Trust and Wealth Services at Key Private Bank. "Charitable Remainder Trusts and Donor-Advised Funds (DAF) are two powerful vehicles that can enable families to be strategic, both tax-wise and 'philanthropy-wise.'"
Measuring Impact is the Biggest Giving Challenge
Measuring impact is the most difficult aspect of philanthropic giving (43%), the poll found. Six in ten (65%) advisors say "hardly any" or "none" of their clients use online charity assessment tools, such as GuideStar and Charity Navigator, to perform due diligence on potential philanthropic donations. "Taking the time to investigate whether your donation is doing what it's supposed to do can be a rewarding process," added Levin.
Key Private Bank is a leading provider of wealth management solutions and advice for high-net worth and ultra-high-net worth clients, including wealth advisory, investment management, trust administration, customized credit, family office and private banking services. Key's wealth management platform combines the market insights of local advisors with a national team of wealth and investment strategists to deliver proactive and personalized advice and expertise to clients. Advisors also leverage partnerships with Key's business banking and capital markets teams to build wealth plans tailored to meet each client's specific need. Key Private Bank's wealth management platform is delivered across 15 of the United States. Key Private Bank has $38.9 billion in AUM and $44.4 billion in AUA at June 30, 2019.
KeyCorp's roots trace back 190 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $144.5 billion at June 30, 2019. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of over 1,100 branches and more than 1,500 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.