Solve three common year-end giving challenges for your clients

Year-end is crunch time for financial advisors: Clients are rushing to meet tax deadlines, finalize charitable contributions and plan for the future. But year-end giving doesn’t have to be just another task on their checklist. Introducing strategies like donor-advised funds, recoverable grants and impact investments can help clients turn their year-end efforts into a foundation for lasting impact.  

In the final weeks of the year, clients often feel pulled in two directions, between the urgency to meet deadlines and the wish to be more thoughtful with their giving. Advisors who can anticipate these moments are well positioned to guide clients toward solutions that create lasting value. 

Here are three common challenges we often hear advisors facing with clients during the busy holiday season — and practical ways to address them while strengthening your role as a trusted partner. 

Challenge 1: “I want to act before year-end, but I need more time to decide where to give.” 

Year-end can bring pressure to make decisions before the new year, even if clients feel their philanthropic priorities aren’t fully formed. They want to dedicate resources for a charitable purpose now but may also want more time to be intentional about the causes and organizations they support.  

Solution: Donor-advised funds

For clients who want to make a significant impact while addressing year-end tax obligations, a donor-advised fund, or DAF, offers a simple, flexible way to bridge this gap. 

A DAF account is a charitable giving account managed by a sponsoring organization. Clients make a contribution to the DAF and receive immediate tax deductions. The funds are later distributed to nonprofits and can be used for impact investing while in the DAF. Clients retain the ability to recommend how the money is invested and when and where it is distributed. 

Clients commonly contribute appreciated assets, including public securities, private investments and real assets, to DAFs. This approach offers a tax-efficient way to donate to the DAF while avoiding capital gains taxes on these assets. You can also advise on investments within the DAF while they grow tax-free, increasing the resources available for future giving. 

Challenge 2: “My family’s foundation wants to have a bigger impact and needs to make grants before year-end.” 

Foundations often feel the year-end crunch more acutely. They want their dollars to stretch further, support time-sensitive initiatives and involve the next generation in meaningful ways. Yet even well-established foundations may struggle to identify the best way to expand their reach or respond to pressing needs before the close of the year. 

Solution: Recoverable grants and foundation-supported DAFs 

Recoverable grants are a way for philanthropists to support nonprofits while maintaining the potential to recover their funds if the grant achieves its financial and impact objectives. These grants are designed to help organizations during pivotal moments, such as launching pilot programs, expanding revenue-generating models or bridging short-term funding gaps. If the initiative is successful and conditions for recovery are met, the grant funds are repaid to the foundation, creating a revolving pool of capital for future philanthropic projects. This approach allows foundations to stretch their impact while maintaining flexibility for new opportunities. 

Foundation-supported DAFs offer additional flexibility. DAFs aren’t just for individuals — they can be a powerful tool for family foundations too. By setting up a DAF, foundations can: 

• Support private impact investments: Use charitable dollars to fund projects like affordable housing or renewable energy startups, learning and benefitting from the robust investment infrastructure that exists at DAFs rather than building that capacity in-house. 
  
• Involve the next generation: Use DAFs to give family members autonomy to recommend grants independently from their “own account,” fostering a culture of giving across generations. 
  
• Expand mission reach: Fund projects or causes that might not align directly with the foundation’s primary mission but still reflect family values. 

By adopting these strategies, your foundation clients can enhance their giving capacity, take on innovative projects and maximize their long-term impact. 

Challenge 3: “I feel tapped out for the year, but I still want to support the causes I care about.” 

Many clients reach December feeling like they’ve already allocated their giving for the year, yet they still want to engage with organizations or causes that feel urgent or personal. They may be excited to learn there are opportunities that allow them to continue contributing without relying solely on additional traditional grants. 

Solution: Impact investments and recoverable grants 

Impact investments allow clients to deploy their charitable dollars to generate both financial returns and measurable social or environmental impact. With these investments, your clients can align their portfolios with their values and build solutions to address critical needs in the areas they care about, such as clean energy, affordable housing or healthcare access. Impact investments can also offer an opportunity to catalyze systemic change by funding innovative projects or businesses that fill gaps where traditional markets fall short. 

For clients who want to make an immediate impact, recoverable grants provide a way to give more now with the potential for funds to be recovered and reused in the future if the funded project achieves its goals, creating a sustainable cycle of giving. 

By integrating impact investments and recoverable grants into their strategies, your clients can extend their philanthropic reach beyond the limits of their annual grant-making budgets. Clients can see their impact grow year after year, creating a sense of pride and fulfillment in their ongoing efforts to make a difference. 

Equip your clients for success 

Across these challenges, one theme remains consistent: Clients want their giving to be thoughtful, flexible and impactful. Advisors who help them navigate these year-end challenges play a critical role in shaping a philanthropic strategy that reflects their values and grows their long-term impact. 

Whether through DAFs, recoverable grants or impact investments, you can guide clients toward choices that achieve their goals today while building a legacy of giving for tomorrow. Year-end becomes not just a deadline, but an opportunity to strengthen relationships and help clients take intentional steps toward creating lasting change.  

Ready to help your clients tackle their year-end goals? Contact us at CapShift to explore strategies that support tax efficiency and your clients’ values. 

Liz Sessler is president and COO of CapShift. 

Advisors’ Corner is a content partnership between ImpactAlpha and CapShift. CapShift’s impact investing platform empowers financial and philanthropic institutions — and their clients — to invest in their vision for a better tomorrow. All content is solely for informational purposes and should not be used as the basis for investment decisions.