As family office wealth management becomes more holistic, philanthropy plays a powerful role in uniting generations – building the bridge to next-gens to create a lasting legacy. However, while wealth tech has ramped up rapidly in recent years, like with trading systems and investment reporting, philanthropic technology has yet to catch up. While philanthropy is a vehicle for bringing people together, its administrative burden on family offices “sucks the joy out of being generous.”
Dealing with multiple accounts
Family offices typically manage philanthropy through various sources such as private foundations, donor-advised funds (DAFs), and direct gifts. Each giving source requires separate accounts and management systems, often tracked in rudimentary spreadsheets. This leads to fragmented data and processes, making it difficult to maintain a holistic view of a family’s philanthropic activities.
Lack of oversight
As a result of not having a complete overview of a family’s total philanthropic contributions, it becomes difficult to assess the impact of the family’s charitable activities, even answering basic questions about multi-year gifts for example. More importantly, the lack of a unified overview makes it challenging to ensure and have confidence that philanthropic efforts are aligned with the family’s stated values and goals.
Compliance issues
Navigating the compliance rules associated with different philanthropic vehicles can be daunting for non-experts. For example, the IRS imposes strict regulations on private foundations regarding self-dealing, payout requirements, and reporting obligations. Similarly, DAFs have their own compliance guidelines, which can vary by sponsoring organisation. Direct gifts require specific language for the IRS to ensure tax deductibility – family offices are a primary IRS target for improper documentation. Since each giving source comes with its own regulatory requirements, staying compliant demands significant time and expertise.
The limitations of legacy tech
Most existing grants management systems are tailored for professional grantmakers and large institutions, necessitating significant customisation to meet the unique needs of family offices or allowing customisation that families don’t need. The systems are often less user-friendly for non-professionals, which can deter family members and their advisors from engaging fully in the philanthropic process.
On the other hand, DAF technology solutions have the opposite dynamic: these platforms historically fall short of providing comprehensive reporting and analytics for family offices. They also lack features that support personalisation and community engagement, which are increasingly important to modern philanthropists. Moreover, the slow advancement in this area hinders the timeliness of grant processing and payment or securities contributions that still require wet signatures and cumbersome documentation.
The shift in new technology
The shift in philanthropy technology is all about leveraging simple and intuitive solutions designed for non-experts that streamline the administration of philanthropic activities. Solutions like TIFIN Give reduce the time spent on administrative tasks and create a more enjoyable user experience. By freeing up advisors’ time, they can concentrate on strengthening client relationships, including with the “rising generation,” and understanding clients’ charitable interests, goals, and strategies. Here are some of the solution’s key features:
- Streamline administration: TIFIN Give simplifies the management of complex and large-scale philanthropic activities into one easy-to-use platform, including private foundations and donor-advised funds. Providing a unified platform enhances efficiency across the family office, allowing users to handle multiple giving sources seamlessly.
- Alignment with client goals: The solution offers tools for generating customised reports that align closely with client goals, allowing family offices to tailor philanthropic strategies to the unique objectives of each client.
- Better collaboration: The solution enhances collaboration by centralising access to essential documents, notes, contracts, grant details, and key dates. Having everything in one place reduces the risk of miscommunication across different advisors – wealth, tax, accounting, operations, etc. – and ensures that everyone involved in the philanthropic process has access to the same information.
- Saves time: TIFIN Give significantly reduces the time required for planning and administrative processes by automating critical tasks such as grant tracking, audit support, and tax preparation. This efficiency allows family offices to dedicate more time to strategic activities that enhance the impact of their philanthropic efforts and advisors to focus on adding value to the family, not tracking down acknowledgement letters.
To sum it up
Modern philanthropy technology is transforming how family offices manage their giving. By streamlining administrative tasks, enabling better collaboration, and aligning with client goals, platforms like TIFIN Give equip family offices with a holistic view of their philanthropic activities. This not only simplifies compliance and oversight, but enhances a family’s satisfaction and fulfilment. As a result, family offices can focus more on uniting generations and creating a lasting legacy.
TIFIN Give enhances the traditional donor-advised fund and other charitable giving journeys in a way that places family offices and wealth management firms at the center of their client’s philanthropic needs.