Creating a charitable legacy is essential for philanthropists. How do you ensure your charitable intent is passed along beyond your lifetime?
When using a donor-advised fund, one way to pass along your charitable intent is to name successor advisors to advise your fund when you are no longer able to do so.
In this clip, Senior Philanthropic Advisors Whitney Hosty and Jenny Erdman discuss the importance of naming individuals as successor advisors and organizations as beneficiaries of your charitable assets after your lifetime. Jenny and Whitney cover:
Our philanthropic advisors can help you name successor advisors to your fund and document your charitable legacy for the future. Contact us today to get the conversation started.
More resources on successor advisors and grantmaking beyond your lifetime:
Video Transcription
Whitney Hosty: Hi, and thank you for joining us today. We’re so excited to have this opportunity to continue on your philanthropic journey. I am Whitney Hosty, philanthropic advisor, and I’m joined today by Jenny Erdman, another philanthropic advisor. And in this segment, we’re excited to talk through grantmaking beyond your lifetime. Welcome, Jenny.
Jenny Erdman: Hello, Whitney.
Whitney Hosty: Jenny, I would like to talk a little bit about something our donors may have completed on their fund agreement form and maybe not knew entirely what it meant. Can you tell me a little bit more about what is a successor advisor?
Jenny Erdman: A successor advisor is a person or persons that a donor names for us to take direction from regarding the fund when the donor is no longer able to do so. So there are two important areas where we take direction from successor advisors, and that’s relating to grants to charities from the fund and how the funds and assets will be invested.
Whitney Hosty: And who makes a good successor advisor? Who should I consider naming?
Jenny Erdman: Successor advisors can be children, grandchildren, nieces, nephews, trusted friends, people that know you really well and know what causes are important to you. They can all be great successor advisors.
Whitney Hosty: When I’m no longer able to advise on my fund, how would a successor advisor begin? What happens?
Jenny Erdman: Well, first, we reach out to the successor advisors to notify them that they are now stepping into this role and that we are there to help them and guide them according to the wishes that the donor has expressed during their lifetime. Donors will typically either set up their successor advisors to come together, which we call gather and unify, successor advisors can come together to make grantmaking decisions about the fund, or the donor may decide to give each successor advisor his or her own donor-advised fund. So we call that divide and multiply. And then donors also have the option to leave the grantmaking decisions up to us.
Whitney Hosty: Jenny, I wanted to go into a little more detail. You mentioned a couple of different options. Do you have any examples maybe starting with gather and unify.
Jenny Erdman: Absolutely. I would say that the gather and unify model is probably the most popular choice for our donors, and that’s where all of the successor advisors come together to make grantmaking decisions about the fund.
Whitney Hosty: Great. And what about divide and multiply? How would that work?
Jenny Erdman: This is a great option. So divide and multiply is when the donor provides that each successor advisor will receive his or her own donor-advised fund from the original fund. So dividing up the original donor-advised fund into separate funds for each successor advisor.
Whitney Hosty: Great. And how have you seen this work with donors? Do you have any examples?
Jenny Erdman: I do have an example. So we have a donor who set up a fund and named his children as successor advisors, and then he further provided that when his grandchildren reached the age of 30, they would each receive their own donor-advised fund from the original fund for their own grantmaking.
Whitney Hosty: Oh, great. What an incredible legacy to be able to continue support for the community.
Jenny Erdman: Absolutely.
Whitney Hosty: Love that. Now, what if, is there an example that you could share maybe about donors who have said they’re passionate about a certain need in the community and have decided to leave the work to us?
Jenny Erdman: That’s a great question. What we would do in that case is our board of directors would govern and make decisions about how the fund assets were granted out to organizations. And so our staff would assist in this by taking a look at the donor’s grant history from the fund.
Whitney Hosty: And, what if, I know we have some donors who maybe are interested in a lot of these different approaches, is there a way to customize it if want to both have successor advisors but also maybe give some additional direction on a fund?
Jenny Erdman: Absolutely. So we call that the hybrid model. That’s where you have some of your grantmaking, it’s going to be done by us according to your expressed intentions, but you’re also going to name successor advisors who are going to also have the ability to make grantmaking decisions. So say, for example, you want as a donor to continue making grants from your fund to your church and your alma mater, you can let us know how you want those grants to be made when you are no longer living. And then you also have set aside assets for your successor advisors to make grantmaking decisions on. Really, there is so much flexibility. It’s hard to emphasize that enough that we really do try. We have the tools and we have the staff expertise to support pretty much whatever the donor wants to do with their fund beyond their lifetime. We really do strive to ensure that we can make that happen for them.
Whitney Hosty: I’d love to go into that a little bit further. So maybe I’ve already set up donor-advised funds for my children or maybe I just already know what I want to support with my charitable legacy. Maybe I really care about a certain issue or need or organization in the community. How could you support in really aligning that giving and directing it towards a cause or an org?
Jenny Erdman: They can name one or more organizations that they would like to receive grants from the fund beyond their lifetime, and we don’t place any limit on the number of charitable organizations that they can name as beneficiaries from the fund. And so they just need to let us know how many organizations, the names of those organizations, and how they want resources from the fund to be allocated among those organizations. So we can have that conversation and set up a plan to make that happen.
Whitney Hosty: And how long can that support continue for organizations beyond my lifetime?
Jenny Erdman: It can continue as long as the donor wants it to continue, as long as the fund assets are available to make grants to support those organizations.
Whitney Hosty: How do I provide this documentation or how do I inform you about what I want to do with my fund?
Jenny Erdman: Absolutely. We are here to help our donors. So it starts with a conversation. We encourage our donors, if they haven’t already documented their charitable legacy, to schedule a time with a philanthropic advisor to document their charitable legacy. And it really starts with a conversation. We want to know, what causes are important to you? Do you have people that you want to name as successor advisors or would you rather go the route of naming an organization or do you want the Community Foundation or Greater Horizons to take care of that for you? And then we will find out, do you have any particular geographic boundaries that you want to focus you’re giving on after your lifetime? Are there any absolutes or stringent guidelines that you want to include? Do you absolutely not want any grants from your fund to go to certain types of organizations? We will gather all of that information and document it appropriately so that when you’re no longer able to direct grantmaking from your fund, we can either aid your successor advisors or we can implement those plans on your behalf.
Whitney Hosty: Jenny, we often hear from successor advisors when they become advisors about how meaningful it is to be able to take over a loved one’s fund as an advisor and continue that charitable legacy. Do you have any stories or examples you could share?
Jenny Erdman: I do. It really is a wonderful gift to leave your successor advisors, and it’s a very meaningful part I think of our jobs as philanthropic advisors to share the history of the donors giving with their successor advisors and to see the joy that it brings their successor advisors to see the impact that their loved one has made in the community with their giving, and to feel the responsibility that they have in continuing that in their memory and in their honor.
Whitney Hosty: What a great legacy to be able to continue.
Whitney Hosty: Jenny, thank you so much for joining me today. I think this has just been such a helpful conversation to be able to think more especially about successor advisors. I know that a lot of donors maybe haven’t even thought about it since they originally set up the fund, and this is such an important topic.
Jenny Erdman: Absolutely. Thank you, Whitney.
Whitney Hosty: Thank you so much for joining us for our conversation today. If you are interested in learning more or perhaps you’d like to update your successor advisors or maybe discuss other options for documenting your charitable legacy, please don’t hesitate to reach out to philanthropic advisors.
