Wealthyist E25 | Philanthropy Trends: An Interview With Jason Kohout, Chair - Family Offices Team, Foley & Lardner

Wealthyist

In episode 25 of "Wealthyist," Annex Private Client Wealth Strategist Brian Lamborne discusses charitable giving with Jason Kohout, Chair of the Family Office area at Foley and Lardner and director of the Wisconsin Philanthropy Network. Kohout, an estate planner, focuses on helping clients with wills, trusts, tax planning, and charitable contributions, including creating private foundations. Key points include:

• Current Trends: High-profile charitable acts, like the Patagonia founder donating 98% of the company to environmental causes, are rare but notable. Naming rights for buildings at universities or hospitals are common in philanthropy.
• Economic Impact: Recent economic turbulence hasn’t significantly altered charitable giving patterns. However, investment advisors are increasingly integrating charitable giving into tax-efficient strategies, with donor-advised funds (DAFs) becoming mainstream over the past decade.
• Tax Planning and DAFs: DAFs are popular for their simplicity and tax benefits, especially for gifting appreciated assets like business interests before a sale, which can reduce capital gains tax and provide deductions.
• Pending Legislation: Uncertainty around tax legislation, particularly the estate tax exemption potentially halving by December 31, 2025, is a concern. Kohout advises against delaying planning due to this uncertainty, as most charitable strategies remain effective regardless of legislative outcomes.
• Timing Considerations: End-of-year planning can strain resources, so early action is recommended for complex gifts requiring valuations or legal work.
• Gender Dynamics: Women influence 85% of charitable giving, often driving decisions in couples or as surviving spouses, focusing on community impact.
• Religious Giving: Religious organizations receive about 36% of charitable gifts. For complex gifts (e.g., appreciated securities or real estate), Cahute suggests using sophisticated DAFs to manage funds effectively, as smaller organizations may lack expertise.
• Younger Donors: Millennials and Gen Z integrate technology into giving, using DAFs via mobile platforms and prioritizing philanthropy in lifestyle choices. They also invest in newer assets like AI and crypto, which poses challenges due to outdated IRS rules from 1969, requiring valuations for non-currency assets like cryptocurrency.

Kohout emphasizes aligning charitable giving with personal values, tax efficiency, and long-term goals, while navigating evolving economic and regulatory landscapes.