Navigating Donor Trends: How Financial Advisors Can Thrive During the Great Wealth Transfer

The Evolving Landscape of Philanthropy: Trends in Giving and Legacy Planning

Generosity Is on the Rise: A Look at Individual Giving and Bequests

In 2023, Americans donated an estimated $374.4 billion, marking a 1.6% increase from the previous year (although inflation slightly tempered that growth). A significant chunk of these contributions came from bequests, which totaled $42.68 billion, reflecting a 4.8% jump in donations through wills and estates. Combined, individual giving and bequests accounted for a whopping 75% of all charitable donations in 2023, underscoring how central these forms of giving are in shaping the future of philanthropy.

The Great Wealth Transfer and The Role of Philanthropic Financial Advisors

As the baby boomer generation passes on $70 trillion in wealth over the next few decades, this monumental shift presents a golden opportunity for financial advisors to weave philanthropy into their planning conversations. In fact, nearly 9 out of 10 next-gen heirs (87%) are choosing new advisors — often ones who offer support in planning charitable giving and helping them leave a meaningful legacy (McKinsey, 2020). Younger investors (ages 21–41) are particularly drawn to advisors who prioritize philanthropy and are twice as likely as Boomers (ages 60-79) to select advisors who provide charitable planning, making this an exciting time to build deeper, more purpose-driven relationships with clients (Fidelity, 2023). CAF America is here to help advisors understand the evolving motivations behind giving, offering insights that will empower them to guide their clients toward creating lasting, impactful legacies.

To explore these trends further, Charities Aid Foundation (CAF) conducted targeted research in the U.K. to help them see what this would look like on a more focused scale, offering deeper insights into the evolving role of advisors in philanthropic planning.

CAF’s Efforts to Bridge the Philanthropic Financial Advisor Research Gap

To better understand the role of financial advisors in philanthropy, CAF conducted two comprehensive surveys in the U.K.:

1. Advisors’ Perspectives: CAF surveyed 215 financial advisors, including independent financial advisors (IFAs), chartered planners, and  financial managers, about their approach to philanthropy, how seriously they take it, the perceived interest their clients have in it, and looking at the reasons why they do or don’t talk about philanthropy.
2. High Networth Clients’ Views: To fill in the blanks on the donor side, CAF polled over 500 high-net-worth (HNW) individuals with investable assets exceeding £1 million to understand their attitudes toward philanthropy and whether or not they want support from their advisors on philanthropy.

Advisors’ Perspectives Results

The first survey found that there is a significant gap in how prepared financial advisors feel to approach philanthropy with their clients. One in five advisors admit they do not know how to advise clients on becoming philanthropists, and 72% fail to include philanthropy in their initial client fact-finding processes. Often, discussions about charitable giving are limited to estate planning, such as asking clients if they plan to donate funds through their will. This narrow approach overlooks the opportunity for advisors, particularly financial planners, investment managers, and financial managers, to take a more holistic approach to supporting their clients’ wealth and legacy.

Encouragingly, 21% of advisors recognize a direct link between offering philanthropic advice and winning business, a trend expected to grow as demand for such services increases. Advisors confident in their philanthropic expertise are 2.6 times more likely to work with ultra-high-net-worth individuals (UHNWIs) than those who lack confidence. From the client perspective, 62% of individuals surveyed reported that charitable giving is an important part of their lives, with 57% of HNW individuals aged 18-34 expressing a desire for philanthropic guidance from their advisors. Additionally, philanthropy has emerged as the most popular pastime among UHNWIs, ahead of sports and other activities, highlighting both the interest in and need for charitable planning as a core advisory service.

High Networth Clients’ Views Results

Insights from the high-net-worth (HNW) individuals survey highlight the growing importance of philanthropy in their lives with62% of respondents stating that charitable giving is a meaningful priority for them. This interest is even more pronounced among younger clients, with 57% of HNW individuals aged 18–34 expressing a desire for philanthropic guidance from their advisors. These findings underscore the opportunity for advisors to play a more active role in helping clients align their wealth strategies with their charitable goals.

Further Research: Reasons Financial Advisors Lack of Confidence Advising
Philanthropy

Financial advisors often feel uncertain about advising on philanthropy, with 77% citing a lack of expertise and 50% noting they’ve never received training in the field. Other barriers include uncertainty about where to direct clients for specialized guidance (22%), concerns over added administrative burdens (19%), and unclear benefits for their clients (15%) or their own business (16%). Additionally, some worry about the legitimacy of charities (16%) or have faced negative reactions when broaching the topic (11%). At CAF America, we strive to support financial advisors with the tools, resources, and expertise they need to approach philanthropic advising with confidence and ease.

Improving Philanthropy Engagement as an Advisor

At CAF America, we empower advisors to better serve their clients by leveraging our connections and expertise in philanthropy. By enhancing your ability to guide clients toward impactful giving strategies, you can strengthen your relationships and elevate your practice.

Consider these key statistics:

These numbers highlight a critical gap in the general wealth advisory approach. With growing client interest in wealth distribution to charitable causes — often on par with or exceeding concerns about wealth preservation — there’s a significant opportunity for financial advisors to adopt a more holistic strategy.

Integrating philanthropy into client conversations isn’t just beneficial for your clients — it positions you ahead of competitors. Making this a core part of your professional brand can attract more philanthropically minded clients, especially younger ones, and deepen your value to existing clients. Stand out by leading the way in addressing this emerging priority for UHNW donors.