Wealth Professional: Can a 'charitable allowance' help with financial literacy, wealth transfer?

In their latest editorial, Wealth Professional highlighted Charitable Allowance as a valuable tool for teaching financial literacy, philanthropy, and strategic wealth transfer.

Speaking in the article, CEO John Bromley explained how Charitable Allowance leverages tax-efficient charitable giving to instill financial and philanthropic values in the next generation:

“Charitable giving is a super tax-efficient way to introduce this idea of values. When you use philanthropic planning and incorporate it into the generational wealth transfer, you get a more tax-efficient transfer while creating a context that almost imposes the charitable dollar asset on the family, which they have to grapple with giving away as best they can. They then start to develop their own strategic ideas of how to put that charitable money to use.”

Through Donor Advised Funds (DAFs), parents and grandparents can allocate charitable allowances to children, giving them real-world experience in decision-making, impact assessment, and financial responsibility - all within a philanthropic framework.

“The core lessons that come with money management are inherent in this system. The money these kids get as a charitable allowance can only be used charitably... It forces them to focus on choosing what values and causes they would prioritize and allows them to work analytically in that more limited context.”

What makes Charitable Allowance even more valuable for financial advisors? It can be funded with both cash and securities, providing an early introduction to investing, portfolio management, and tax-efficient giving. Kids can decide whether to hold securities in their DAF or donate the proceeds from selling them, offering an interactive way to learn about investment strategies and philanthropy at the same time.

📖 Read the full article here: Wealth Professional: Can a Charitable Allowance Help with Financial Literacy & Wealth Transfer?