A financial advisor shares key strategies to maximize your giving impact

Landis Wiley is a Certified Financial Planner (CFP) in Cedar Rapids, Iowa who serves a wide range of clients as part of the leadership team at Basepoint Wealth. Giving is a significant part of many financial plans, so we engaged Landis to share insights from some of the conversations he regularly has about strategic philanthropy with his clients.  We sat down with Landis, and asked some big questions about how financial planning and giving strategy can work together to meet your personal mission. Here’s the interview.

First off, Landis, can you tell us about yourself? How did you become a financial planner, and why do you love this work?

I grew up on a family farm, and bought my first stock in Ford as a kid. That ignited my interest in investment. After college, I taught business and IT, picked up a lot of useful skills, and then moved to become a CFP and helped found Basepoint. We’re a very focused group of passionate advisors, and I’m a problem solver at heart. I value being involved in organizations where I can make a difference and affect progress.

In your opinion, what is a good financial advisor?

A good financial advisor helps families connect dots that they may not even know are there. What I mean by that, to use a quote from a former secretary of defense, there are ‘unknowns’ that we know exist, but many of the issues we will face are ‘unknown unknowns’ that we might not even be currently thinking of.  A great financial advisor helps you plan for even the “unknown unknowns.” A great financial advisor helps you do better by preparing for things we’re not even anticipating right now, surrounding their clients with subject matter experts who can help. I love clients who are willing to embrace that unknown and do the work of securing the future in today’s uncertain environment.

What should people planning to donate big to a charity really consider, and how can they utilize their financial advisor for help?

I think that a common opinion in the world is that wealthy people have it “easy.” But wealth is really a proxy for more complexity. Our industry has done a really good job making things complicated.   Many incredibly successful people don’t understand the intricacies of wealth management. That’s just fine, because they’ve gotten to substantial wealth and kept it because they’re experts on their personal business, on farming or maybe a technology they created. And giving to a charity, especially in a big amount, can be a very complex decision. It’s crazy for us to think that high wealth individuals would also be philanthropy experts.  To become a giving expert, you’ll need help. You’re definitely going to need some advice on financial giving vehicles, and how to do things in a tax-advantageous way. You also probably need some help evaluating where to give, and what will make the biggest difference both for the charity and what you want to accomplish personally and as a family.

We totally agree, that’s why we founded ROG. So, what do you give to personally, and why? How has your giving changed?

I am hyper-focused locally. I see needs in our local community, things my kids tell me about, even with their friends at school. The vast majority of my giving is to schools and local charities where I’ll see the impact, and that’s also where I volunteer and serve on boards to help.  Giving is an investment, and I think most people want to see their investment pay off in their own communities. Even if they are giving to a bigger cause, it has to relate to what people are seeing in their own backyard.   I’m a big proponent of education, and the Cedar Rapids School Foundation. I deploy my financial resources there. And I’m always asking, how can I help local organizations tap into greater wealth? With both smart decisions, and access to others who can give.

How do you think someone with significant wealth to distribute to a cause they care about should be making that decision?

It’s really hard for people to make big giving decisions. Say I’m a high wealth individual with a general idea that I’m going to give to charities. I can go look up all the ways you can give money, find arguments for which are the best, but there are lots of moving parts, and really good ideas can become individual poor decisions. So, when donors don’t know how to facilitate a gift, it just stops. And we’re constantly being given opportunities: Here’s the marketing pitch from the community foundation…this is what my friend Nancy did. From both the financial planning side, and the charity pitch side, nowhere in there do they tie all that back together to what the donor really wants to do.  For example, do the donors want to give directly to a program, or do they want to give to a permanent endowment for long term support? How much will go to the church, and for what? As I said before, wealth breeds complexity.

Well, we agree. It can be overwhelming. What are some key considerations, from your perspective?

I’d go back to my financial planning basics. You have to consider the implementation steps, all driven by a planning process. That planning process is designed to gather the pertinent facts, and consider everyone involved. For example, children. Giving decisions can conflict with family and their kids. That side can get pretty thorny. The donors might even have the opinion that the kids can take care of themselves, and want to give away a lot. There are some important family discussions that should happen.

What would you want charities to know about those with significant wealth, and how they make decisions about where to give?

A big component of giving is assuring the donor that their funds will be well used by the charity. Donors are asking: how can they control that this will go to what they really wanted to give to? They are asking: What if the charity goes in a bad direction, what if they start doing things I don’t want them to?  And sometimes, the charity just isn’t really ready to receive a big gift. They take it, and you find out later that some of it went to the cause, but some of it also went to a new espresso machine in their kitchen. So, donor concern about where their investment will go is real, and no one wants to give to the bloated salaries of mega-charities.

Well, that’s a real wake-up for charities. Is there anything also you’ve noticed that maybe charities don’t understand? - If a fundraiser is engaged with a financial advisor, working with their client to make a big gift, what would you want them to know?

I have a couch here in my office, and half the time, we’re playing psychiatrist. Helping people really be happy. And the reality is that most financial planners never tap into that. Usually, financial planning is nothing more than a sales funnel. To facilitate sales you want to eliminate barriers, and that’s how you make money as a broker.  As planners, we’re primarily here to preserve, and grow wealth. And giving money away, to some planners, well that’s giving away potential future compensation. That’s where the fiduciary shift has really changed things. A fiduciary planner works in the best interest of the clients. And I think it’s interesting to also consider that role as working to help them give away money better, and more strategically. You can make more money as a broker. Working as a fiduciary, you’ll give up some profit, but you’ll be doing better by your clients, in so many ways.  Our intent is to identify goals, achieve them and maximize wealth along the way. That’s not the norm. The vast majority of people out there do not have an unbiased advisor in the middle.

What advice do you have for fundraisers from the financial advisor viewpoint?

I think the challenge for fundraisers, the real difficulty is: Where do donors’ interest really lie? What is the intent of their charitable giving?   Fundraisers work for someone who wants money. The interest of the fundraiser is to maximize the amount of giving, in usually a short time frame. On the other side of the equation is a potential donor, and their interest may lie with your cause, it might not. The timing and the structure of that gift may also not align with the fundraiser.  The challenge for a fundraiser is: how do you make potential donors at ease by offering them guidance? How do you identify their goals, align it with the needs of the organization? That’s a big goal as a fundraiser, and you should probably get help.  Bring the financial advisor into that conversation to help the donor and client feel comfortable. The biggest role an advisor needs to play in the conversation is helping the donor feel comfortable about what, how and when to structure the gift.  If a fundraiser can find a way to bring that consultative support to a donor, they will enhance the success of the charitable relationship – whether it happens in today’s campaign, or not. Maybe you get $500,0000, and they become a loyal repeat customer, and then you receive much more down the road. Most donors will benefit from giving strategies that are spread out over time.Rather than having one person that is transactional in nature, they can engage the whole family (and probably some friends), to really maximize giving.   Financial advisors are often in the middle. They might not align with the fundraiser, and may even be limited in their alignment in the client. They may want to retain control of the asset. It all has to be balanced, to do the greatest good for the client.

Final question: What’s your advice to those looking to make a transformative gift to charity?

Charitable giving has changed a lot. The accessibility of giving for the common person has changed. Creating a personal or family foundation is much more accessible. Even a few years ago, it was unreasonable to even consider that option. There are some solid benefits to setting one up. You can do it for under $1 million, and it’s still reasonably efficient to start operating.   So, many donors are saying: I can route my money to my own foundation, and my kids or other people can give that money out when I’m gone. It can go to organizations, campaigns, whatever, in a flexible way. I was working with one client, and her donations were going to humane societies. Her interest was to help individuals. So, she set up a private foundation, focused on pet and animal welfare. She could literally see someone with a limping dog on the sidewalk, strike up conversation, and write a check. That’s a very different way to look at things. The combination of new avenues, new technology, and the transition to fiduciary planning makes a real difference in today’s giving. Get with your planner, get help from experts, and consider the best ways to maximize your impact. But be deliberate, and strategic. You’ll do more good. We thank Landis for his time and for sharing the passion to help clients give smarter. Basepoint Wealth, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.