Intro: Welcome to More Than Wealth with Darren Gold and Samantha Hodgkins from the Gold Wealth Management Group. In this podcast, we help business executives, business owners, and high net worth individuals navigate the multifaceted world of wealth planning. No matter how complex the situation, we provide financial advice and guidance to instill greater confidence in pursuing your life's goals. By leveraging the vast resources of UBS and collaborating with a team of external specialists, we'll delve into both basic and complex planning topics. Beyond the numbers. We'll also explore the stories behind the wealth by interviewing business owners and thought leaders in our community. We aim to share insightful and inspiring tales of success. Join us on this journey where we explore wealth and the compelling stories behind it on more than wealth.
Hello and welcome to The More Than Wealth Podcast with the team from Gold Management Group. Today's guest is Megan Clifford, regional Director New England at National Philanthropic Trust, NPT As a regional director, she cultivates relationships with financial advisors in Connecticut, Massachusetts, Maine, New Hampshire. Rhode Island and Vermont providing consultative support to help clients achieve their philanthropic goals. She is based in Boston, Massachusetts. Megan has over 20 years of experience in the nonprofit sector working with donor-advised funds. Prior to working at NPT, she held the roles of senior vice president, senior relationship manager, vice president, and assistant vice president at Bank of America Charitable Gift Fund. Earlier in her career, she also served as Grants management specialist with Dana-Farber Cancer Institute, manager of Grants and Foundation relations with the American Ireland Fund and Manager of Children's Program with
Edness Women's Refuge in Dublin, Ireland. Megan earned her Bachelor of Art in Social Work from the University of Vermont and obtained her social work license in both the state of Massachusetts and the Republic of Ireland. Megan also holds the chartered advisor in philanthropy designation. Now here are your hosts of The More Than Wealth Podcast, Darren Gold and Samantha Hodgkins.
Darrin Gold: Welcome to More Than Wealth, where we explore the many ways financial decisions shape our lives, our futures, and the communities we care about. I'm Darren Gold.
Samantha Hodgkins: And I'm Sam Hodgkins. Today we're diving into a topic that's close to the heart, philanthropy, and to help us unpack it all, we're joined by Megan Clifford, regional Director at National Philanthropic Trust that we will shorten to NPT moving forward. MPT is one of the largest independent charities in the US that specializes in donor-advised funds.
Darrin Gold: Megan, welcome to More Than Wealth. We're thrilled to have you on.
Meghan Clifford: Thank you so much for having me. I'm delighted to be here and excited to talk to you
both.
Darrin Gold: We've been a great partner of ours for, for many years and a really, uh, excellent part of our extended team, so we appreciate you taking the time today. So, Megan, let's just jump right in. Let's start with big picture first, what the heck is a donor-advised fund, which we'll refer to as a daf?
Meghan Clifford: Great question. So overall, the simplest term is a donor advised fund is in and of itself a 5 0 1 3 public charity to which donors can put money into, receive a charitable deduction for that contribution that they made, but then take their time deciding where they'd like to grant to. So it's a really great, easy, turnkey approach to philanthropic planning and charitable giving, and becoming more and more popular.
Samantha Hodgkins: Awesome. Thanks for that, Megan. Um, can you just do talk about kind of the main benefits donors should be aware of specifically let's jump into from the giving standpoint and the tax planning standpoint, if you can just dive in a little bit deeper there.
Meghan Clifford: First, I would say ease, especially when
you're looking at a donor advised fund, let's say, versus a private family foundation, which can be quite onerous from administrative standpoint. There are fees involved with that. You know, there's a lot of upkeep. You need a board, things of that nature. For a private foundation with a donor advised fund, the sponsor, in this case, let's say NPT, takes care of all the administrative pieces of your charitable giving. So again, we're the 5 0 1 C3 public charity. You make a contribution, you can choose to have an investment strategy that will grow tax free. So more charitable dollars for you to utilize. Um, we take care of all the administration pieces of your giving. It's the due diligence checks for the charity, the mailing of the actual grant to the charity. Or some of our organizations are registered with PayPal, which is a wonderful way for a very quick grant to go out the door. Wow, that's great. Which is a piece of really great new technology that we're utilizing. Um, and also I think just it, it allows for some of the things
that a foundation would in that you can have legacy planning. You can have reoccurring grants, but donor advised funds are great for, let's say you're having a liquidity event and you need to give some money to a charity to help offset some things from a tax perspective. You also, at the same time, know you wanna be charitable, but you're not quite sure where and how you wanna make that impact. You open up your donor advised fund. You get the travel deduction and then again, you can take your time deciding where to grant to. It's not like a private foundation where you have to give away 5% a year. Most donor advised funds, just ask for some kind of activity, be it a grant out or contribution in within a few years. And we also have a great team here. If you're not quite sure where you wanna give to or maybe you wanna know how to have that conversation with your family,
Samantha Hodgkins: we can
Meghan Clifford: help you with that as well.
Samantha Hodgkins: Yeah, it's important. I think a
lot of people use donor advised funds and foundation interchangeably and they're very different and DAF is just so simplistic for clients. I, those are some really great benefits. Um, I think one misconception is, like you said, they have to. Uh, fund the donor-advised fund and then immediately send out that money to the charities, and that's super overwhelming. So that's a great point to have. Um, I think another misconception that we hear a lot clients, even our family members when we're talking about donor-advised funds, is that you have to be ultra wealthy to open one. Can you kind of talk about that misconception?
Meghan Clifford: I've been in the DAF space for over 20 years, and I can tell you. You do not have to be ultra wealthy to have a donor-advised fund. Um, you know, and different DAFs have different minimums as far as what you can open, open with. Um, so it's really about finding the right donor-advised fund space for yourself. Um, but in no way do you have to be ultra high net worth to have a fund.
Darrin Gold: Hmm.
Meghan Clifford: So, donor advised funds are
great for kind of reactive giving. Private foundations can take a long time to decide where they're going to, um, rent money out to. Whereas with a donor advised fund, the money's already set aside. So say there is a natural disaster or a charity comes to you, a friend is racing in the PMC and you'd like to support them, um, the money's already set aside and the donor advised fund, you are not going into your own finances then. So it's a great way to quickly get support out the door. Um, and again, the, the donor-advised fund sponsor is taking care of all that administrative burden for you. So I think that's a great, a, a great way to look at it as well.
Darrin Gold: That's a huge benefit. My wife and I do have a, a donor-advised fund, and it is so easy to use. The platform is simple. Um, I, I don't know. So can you talk a little bit about, so from the point, let's say for example, you mentioned the. Uh, pan mass challenge. So you wanna donate to somebody that is, that just completed the pan mass challenge. What's the, what are the
logistics and what's the timeframe from making the gift to actual res uh, the charity receiving that gift?
Meghan Clifford: Well, I'd like to pause first and just give high level how a donor advised fund can be used, because it does differ than giving out of pocket directly to a charity. And the basis is, and this is all donor advised funds across the board, the basis is. You've given that money to a charity for which you received a deduction. So the best rule of thumb is no goods or services or personal benefit back to yourself or your family. So what does that mean? You can't, you know, buy a table at an event or.
Darrin Gold: Maybe a golf tournament, maybe something like that.
Meghan Clifford: Exactly. Anything where you're gonna be participating in or getting good through services. Now, at the PMC or the Boston Marathon, that's a bit different because you are supporting their fundraising efforts for a charity, not the individual themselves. So certainly allowable. Um. I just saw a whole bunch come through for the PMC. Another race already happened, but we're
still still getting money for those. So basically you submit the grant. We always say submit it directly through the donor portal. I know a lot of charity websites might have a link to like a, a widget for donor advised funds. Those don't allow you to put the specifics in necessarily. So if you wanna support a specific writer or participant, go directly to the DAF website. You find the charity. Put in the details. We take care of the rest and issue the grant out.
Samantha Hodgkins: It's so easy.
Meghan Clifford: It's so easy. You can de decide if you'd like it to be anonymous. Just your name, your name and address, totally anonymous. So every time you put a grant in, you determine how you'd like it to look when it's received by the charity.
Darrin Gold: Great. And can you talk a little bit about the, the actual, uh, the, the giving resources and the, the team or the process where you're protecting, uh, donors from let's say nefarious type of charities? So there might
be a charity who has ti terrorist ties or something like that. We've got a lot of executives that, um, use, uh, donor revised funds and there is kind of backend just protection for them. To ensure that these are viable and legitimate charities when they make the the gifts.
Meghan Clifford: So again, we take care of all that administrative burden. So when you log onto the donor portal, you have access to GuideStar, which pulls directly from the IRS database, and from there you can see is it a 5 0 1 C3 public charity? Mm-hmm. Or equivalent. You won't always find them on there. By equivalent, I mean religious health of worship. Or Governmentality, such as a public school, they don't have to register with the IRS. They're kind of already considered a charity for those purposes, but we're always going to do our due diligence on every grant that is submitted. Is it a 5 0 1 3 public charity or equivalent? You know, if it's an international grant, for example, we're looking at equivalency, determination, expenditure,
responsibility, the OFAC list, all of that so they can rest assured. That the money is going to a verified charity because again, the donor advised fund sponsor is the one actually making the grant. So we wanna make sure as well to protect charitable status that the grants are only going to verify charities and that the purpose is allowable from a donor advised fund as well.
Samantha Hodgkins: I think that due diligence is so key. I mean, no one wants to spend that time kind of digging, deep researching. It's just so easy. Log in, have NPT do the research for them. I think that's awesome. Um, talking about kind of funding a daf, you can fund it with cash. What, what other asset classes are you able to, um, start a start and contribute?
Meghan Clifford: So again, that's the beauty of a daf. They're simple and structure, but can take very complex assets. Cash is still king in so many ways across the board for giving. Especially, you know, at year end people are thinking, oh, I'll just write a check to a charity. There's so much more that you can look at.
Certainly we can take cash, we can take in marketable securities, mutual funds, but also more complex assets. So as you're looking at your client's overall picture, do they have crypto? Do they have a liquidity event coming up? Art. Real estate, private equity, hedge funds, all of that. So if those things kind of bubble up during a conversation, especially as we get closer to year end, that's where you would bring myself in, um, to kind of talk that through what it looks like. And then we take it from there As far as the due diligence. 'cause we're looking at three things. Can we accept it? Can we hold it even for a day? And then what is the path to liquidity? But all of those things, all the more complex and liquid assets are certainly feasible for a donor-advised fund.
Darrin Gold: So I ideally then you really want to target appreciated assets because you're, you're giving away or you're gifting something with a large capital gain
potentially. And so not only are you avoiding, I dunno if that's the correct term, but I guess suppose it is. Capital gain, but you're also on the fair market value of the total value of the gift. You're getting a deduction on that as well. So it's really a double benefit. You're, you're not paying that capital gain and then you're also receiving a deduction on the total amount that gets gifted into the donor advised fund. Is that, is that accurate?
Meghan Clifford: Exactly. So long term. So a year and a day, you're going to receive the high, low average, or FMV for the day you receive those shares. Um, they're then sold and the proceeds are placed into your donor advised fund invested, so more charitable dollars tax free for you.
Darrin Gold: Okay. That's great. How have the, the recent tax laws changed, uh, or, or reshaped philanthropy? Any significant changes in the re reconciliation act that that affect the way that we give?
Meghan Clifford: I think that remains to be seen, to be honest
with you. Okay. It's still early days and all of that. I think what we will see is that, you know, because these changes really aren't taking or kicking in until next year, we're going to have a very busy year end in philanthropy. I think, um, a lot of people are, you know, you hear the term frontloading, um, their donor-advised fund or their charitable giving, bunching their deduct deductions, and so people are being very thoughtful. I think we're going to have a very busy year end.
Samantha Hodgkins: Right. That is good to know. What is the turnaround time for opening up a daf? You talk to us about that very, very quick.
Meghan Clifford: So everything's done on our donor portal given point. Yep. You can go in for a client or the client goes in. We just see the basic information. You know, who's going to be acting on the donor advised funds? What do they wanna call it? How would they wanna have it invested? We also allow for legacy planning. Now that's not required account opening, but a very good conversation to have with the, with the clients and they can amend it
at any time. So it's not set in stone. Um, they can either name individuals or charity or a mix of both. We also have an endowment option as well. Um, so those are things to think about. But overall, once we received that and the contribution agreement, which tells us what's coming over. To expect for that donor advised fund, you're looking at a few days Now, I will say at year end, the closer we get to December 31st, all those SLAs are a little bit extended, as you can imagine. And that goes to contributions coming in, grants going out, so act, and actually our 20, 25 year end deadlines will be available in the coming days.
Samantha Hodgkins: Okay, so November is a good, November 1st is a good, uh, starting point. I feel like
Meghan Clifford: year end starts earlier and earlier every year we start planning on January 1st Yeah. For the coming, giving season. So never too, never too early to start.
Darrin Gold: One of our favorite conversations to have with clients is the discussion on, you know, bringing in the family,
bringing the kids as early as possible. I think it's such a meaningful, uh, exercise to go through with your kids and, and, uh, you know, something like even a quarterly or semi-annual, uh, giving meeting, uh, we can even do it around the holidays and just talk to your, your young kids or even adult kids about, um, you know, everyone bring, you know. To the meeting or to the discussion, some of the charities that are near and dear to their heart and kind of go through, okay, what's the family giving strategy? And just get everyone involved. Do you, do you see a lot of that when, when working with clients? Is that something that's I do. Yeah. That's great.
Meghan Clifford: I love seeing the family get involved and using, you know, Thanksgiving to talk about, because philanthropy is so personal. Right. And even when you're talking with your clients, you're talking about pretty personal things. What's important to them? What do they want their legacy to be? And so, and money can be very hard for people to talk about, especially in families. So that dynamic is always there as well. But it's so important to have those
conversations. And we've talked about this before. I had a client refer to, they had a private family foundation and they're opening up a DAF as well, and they're referred to the DAF as a private foundation with training wheels as a great way. Bring the kids slowly to understand impact, um, the family's philanthropic, legacy and endeavors. Um, and it gives, you know, the younger gener, you know, we talk about this great wealth transfer and we're seeing inaction and what a better way than to get them involved in philanthropy.
Samantha Hodgkins: I love that it's, it's all about kind of empowering the next generation and it's such a good, like you said, a little training wheel to get them more involved. And, and like Darren said, it's such powerful conversations that you can have at the dinner table. And it doesn't have to be anything big. It's can be like, Hey guys, we have a thousand dollars this year to give back. Like, where do we wanna focus our, our resources? And um, I also think it kind of streamlines like. Where you want to give to like that
year, it's like, okay, are we focusing on education or are we focusing on Debbie running this marathon in her charity? You know, so it, it kind of helps you say no in a very respectful manner is be like, actually we're focusing this year on, uh, natural disasters and education and so maybe next year we'll be able to support your cause. But this year my family and I have kind of discussed that. So it's some really cool conversations that you can have with your next generation grandkids at the dinner table.
Darrin Gold: I love that. Megan do, does the NPT site does it track and kind of categorize all of your kind of different categories that you're giving, whether it be education or, um, all the different types of philanthropy, so you can kind of track that over time.
Meghan Clifford: So our donor portal does break down what the granting, um, history has been for each client. Um, it's broken down by health sector environments and animal care, um, arts and culture, health and human services. So you see the little pie chart when you log into your donor portal.
Samantha Hodgkins: Yeah.
Meghan Clifford:
And just going back to the donor portal as well, everything you need for your donor I buys fund is there. Your granting history, your contribution history, your gift receipts for contributions that are made in everything lives there for you. Um, and we have a great, so
Darrin Gold: much easier Yeah, and a foundation, few things
Meghan Clifford: in one place. We have a great team here too that can walk you through everything. Not everyone is comfortable with using the site straight away, so we're always happy to help that with that.
Darrin Gold: Great. And I don't think, did we talk about minimums? I think that's important to mention as well. So maybe you can just give us, um, you know, NPT, but just kinda the greater daf uh, landscape. Like what's a, a typical minimum to start a donor-advised fund.
Meghan Clifford: You can start as low as $10,000, but again, it runs the gamut and they can be much larger than that as well. And again, comparing it to a private foundation. Which, you know, you need a lot more than $10,000. Um, it really is a better option for a lot of people who
are just starting, um, in this space. And something I always talk to advisors about as well is it's a great tool for your relationship management with your clients as well. They might have a small DAF or a very large relationship with you. So regardless of how small the DAF is, everyone's treated with the exact same. Um. Attention to detail and administrative care, um, across the board, all of our, all of our donors. And we have a great team here that work just with the donors. Again, any questions that come up, any concerns? Um, great resources for you.
Darrin Gold: Okay, great. So, very reasonable minimums. Uh, so let's, why don't we just, you wanna recap real quick, Sam? Yeah. Alright, let's, so let, let's just recap. So Megan, very easy to establish. It seems like it's. No different than opening a typical brokerage account for the most part. Right. Just collecting information from the client, most of which we would already have. Uh, tax filings are handled
at the NPT level. Exactly. Uh, versus a foundation which requires a separate tax filing. Um, so that's, that's super convenient. Uh, investments once the money is in the donor-advised fund. The investments are handled by the advisor for the most part. And then, uh, fees, feess and asset based fee, just like a, I would say a typical mutual fund would be, kind of runs the range in and around 1%. Um, and once that account is established, you can start just gifting different assets into it. You mentioned it, it runs the gamut in terms of which you can gift into that foundation. Uh, but from start to finish, they're very easy to set up. Is there anything that I missed?
Meghan Clifford: No, I think we've, we've talked about all the great points, and I do think that, you know, it's timely as we move towards your end to have this conversation. Now, I'd love to ask both of you how you address this with your clients. And I, I know you make philanthropy, you know, central to all
of your conversations. I'd love to know how that started for you, um, and how you incorporate that into your daily, um, work with your clients.
Darrin Gold: So philanthropy and, and connecting back to the community has always been something that's really front and center for Sam and I. Um, so during our discovery process, we always ask, you know, what is their philanthropic intent? And Right, right off the bat, you know, it's, it's funny. It's, it's, we, we easily get, um, a strong opinion one way or the other. Do you, do you notice that Sam, right? Yes. Um, so once, once we establish whether or not there's a philanthropic intent, then we start to kind of, uh, discover a little bit more about what that intent is, and then we'll set up, uh, either a donor-advised fund or a foundation. And, you know, we really try to involve and, and educate. Like bringing in the family is a big part of this, and I think it's such a great way to communicate and transfer your legacy to your kids. We've got a situation right now that we're working
with, with one of our larger clients, um, where the, uh, the daughter is the successor trustee. Um, so we're bringing her along in terms of educating her, and she gets to see all of her father's gifts and giving for the last, you know, 20 or 30 years and try to get a sense of kind of what her giving strategy is going to be when her, when her father's gone. So it really is a big, a big part of, of what we do. And of course there's the tax benefits to, to it as well. Um, all the, you know, it's. Think about all the stocks and tech stocks that have increased in value significantly over the years. It's just a great way, um, you know, to move some appreciated shares out of their estate and, and continue that giving, uh, strategy that that's worked well for them for so long.
Samantha Hodgkins: And I'll add, not only do we kind of talk about it, but we also put it into practice. We have, um, two client event, client opportunities, volunteer, um, events in November, December that we always invite our clients to. So last year it was the Greater Boston Food Bank and, um, a few other charities. And this year we
haven't quite decided what, we'll, who will be helping in the Boston area, but it's really important to us and our group. So, um, we like to put those opportunities out there for our clients to kind of give back with us in the community. So
Meghan Clifford: that's great. There's so many wonderful charities in Boston and new, so that's great to hear. To your point, Darren, you just touched on one thing I wanted to mention as well, that DAF can really be incorporated in their overall estate planning. Um, so that's something to think about as well. And another conversation we can have maybe another time, you know, naming a DAF and the trust documents, a CRUT or a, you know, things of that nature. So somebody to think about as well as you're looking big picture at your client's book.
Samantha Hodgkins: That's
Meghan Clifford: a
Samantha Hodgkins: great point. Great. So just being mindful of time. Again, thank you so much. But before we let you go, um, it's tradition on more than wealth to ask kind of a health and wellness question because at the end of the day, if you aren't healthy enough, what is kind of the wealth that you just built? You wanna be able to enjoy it. So what's one health and wellness routine tip
trick that you would love to share with all of us that you really just can't live without? That's part of your daily routine. I love this question.
Meghan Clifford: I'm gonna say there's two parts of it. There's the actual, we all talk about physically moving every day, getting that sunlight every morning, and that's something that's very important to me. Um, be it yoga, spin, running, you name it. But I think connection as well. And I think that's what we're lacking these days. It's connection with others. In person. You know, I'm very lucky that I, I live in a neighborhood right now where I can walk out the door and know all my neighbors and talk to everyone. And, um, I think connection is very, very important for, for mental health and wellbeing all around.
Samantha Hodgkins: I love that. Thank you.
Darrin Gold: That's the first connection answer we've got. Yeah, I, I love it. I totally agree. Especially where we are today in society. So make a concerted effort to get out and you just, did you move? Are you, you were in the north end. You're, I'll say that you're a neighbor of mine, so
Meghan Clifford: surrounded by boxes as we
speak, moving to, uh, to back bay at the end of the month, which will be very exciting.
Darrin Gold: That is a big move. So big move. Well, we'll, we'll miss you in the neighborhood, that's for sure. So, alright, well let's, let's close it out. Megan, thank you so much for sharing your expertise in making philanthropy feel approachable. Uh, whether someone's giving 5,000 or $5 million a key is intentionality and we strongly believe that in the right tools, uh, like donor-advised fund can make a, a really big difference. Um, so thank you for taking the time for being on the show today. We want to thank you for joining us. If you've enjoyed this episode, please be sure to subscribe to More Than Wealth wherever you get your podcasts. Until next time, remember, true wealth isn't about what you have, it's about who you become.
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