Accountants can play a significant role in a client’s charitable planning, says Connie Bingham, tax director at Macdonald Page & Co., LLC. In conversation with Jennifer Southard, MaineCF’s vice president, donor services and gift planning, Bingham emphasizes the importance of being client-centered and endorses donor-advised funds.
MaineCF: How are you involved in charitable planning with a client?
Connie Bingham: Accountants know their clients well. They may have a tax situation, such as the selling of a successful practice or a business. In those cases, I will almost always suggest that it might be a good year to make those charitable contributions that they’ve been thinking about.
Another time charitable planning will come up is when people complain about the tax burden or if we’re discussing estate plans and they mention charitable bequests. If I don’t see any ongoing charitable donations, then I’m probably less likely to bring up charitable contributions as a means to achieve some other end. If people are already being charitable or mention a specific charity in conversation, then I’m more likely to bring up the topic of charitable giving.
MaineCF: Do you see any situations where charitable giving techniques might create a better tax situation for a client?
Bingham: There are lots of techniques and tools. I like to start talking about what the clients wants to accomplish and then consider the tools that might be used to accomplish their goals. Right now, the charitable IRA rollover may be one of them.
If a client mentions starting a private foundation, I will suggest a $1 million minimum. We always mention the Maine Community Foundation or another organization with donor-advised funds. I think a donor-advised fund can work any time there isn’t a large enough amount of money or the client just doesn’t want the nuisance of running a private foundation.
MaineCF: Do you have any thoughts to share with your peers about charitable giving?
Bingham: Be client-centered. Start with the client, not the bag of tricks.
MaineCF: Do you have a story to share about people who have used MaineCF?
Bingham: A client facing a corporate transaction a couple of years ago set up a donor-advised fund at the Maine Community Foundation. Another instance to consider the foundation is when family and friends want to set up a memorial scholarship fund. The local high schools are usually willing to take responsibility for the money, but typically the amount of money given is not large enough to warrant a separate trust arrangement. In my experience, the community foundation’s investment results are better than anything you’re going to get from a small money manager.
Connie Bingham is a tax director at Macdonald Page & Co., LLC, in Portland. She concentrates in tax planning for nonprofit organizations, closely held businesses and their owners, trusts and estates. She is a frequent speaker on tax planning topics.