DURING HIS ROUGHLY 25-YEAR RELATIONSHIP with Carolyn Lesemann-Happy and her husband, Ray, Tom Hutchison, their Merrill wealth management advisor, has helped guide the couple’s approach to philanthropy, including Carolyn’s extraordinary step of buying a home for the use of a local woman in need. Here he shares his tips for how anyone can create a thoughtful long-term strategy for giving back.
Treat giving like any other goal. When Hutchison asks clients what they want to accomplish, they may say retirement, their children’s education or maybe a vacation fund. Consider adding charitable giving to that list and approaching it as you would any other financial goal. A useful exercise is to calculate how much you’re donating now. “For most people, this is an eye-opener, in either a good or bad way,” Hutchison says.
“When I talk to clients about their giving goals, I really try to get to ‘what’s our why?’”
— Thomas Hutchison, Merrill wealth management advisor
Think about what impact you want to make. “When I talk to clients about their giving goals, I really try to get to ‘what’s our why?’” Hutchison says. Figuring out what matters to you is something that comes naturally to some but not all. “I find that men approach the tax benefits of giving first, while women tend to think more about making a real change and impacting somebody’s life,” Hutchison says.
Formalize your philanthropy. A donor-advised fund (DAF), which lets you make an upfront irrevocable contribution for tax purposes and decide on grants to nonprofits over time, also has the benefit of providing structure for your giving, Hutchison notes, like a 529 plan does for college savings. It’s fine to start small, Hutchison adds: “You have the infrastructure in place, so that when you do come into bigger dollars you can have a greater impact.”
Make giving a family affair. With a DAF, you can involve the entire family in grant decisions and even give control of the fund to the next generation, opening the door to meaningful conversations about your values. “It’s a wonderful tool to help your children see the bigger picture about money,” he says. Hutchison has named his DAF after his grandmother, who had a major impact on his approach to philanthropy. “Memorializing an influential person in your family can create a legacy of giving that lasts for generations,” he says.