‘Tis the Season – Financial Planning for the Three Stages of Philanthropic Giving

by: R. Mark Shepherd – Founder and CEO

It is that time of year again when the giving spirit abounds, and people are thinking about their philanthropy. The holidays tend to bring out the best in many, and they find themselves inspired to do something for others. Incorporating your giving into your financial strategy can ensure that your generosity has a lasting impact. 

At Shepherd Financial Partners, we have found that there are three primary stages to an individual or family’s philanthropic journey:

  • Inward phase – how can I make an impact?
  • Outward phase – community engagement based on a passion.
  • Legacy phase – with both time and money available, what real difference can I make?

The Inward Phase

This phase is usually at the beginning of one’s career and typically through their 30s. Most people do not have a lot of available disposable income or time during this stage, because they are focused on building their careers, families, and investment in themselves. However, they do look around, see problems that they would like to help with, and begin to identify opportunities where they can make a mindful impact. They begin to develop a sense that there is a place outside of themselves. They may provide smaller, less time-intensive contributions such as a charitable donation to an organization or cause, coaching kids, or joining a church or club. They begin to realize that their happiness quotient is higher when they do not just focus entirely on themselves. 

Giving in this way aligns with this early stage of one’s philanthropic journey because it supports the expansion of one’s social network as well. This type of philanthropy allows the community to see you, get to know you, and trust you. In these early years, it’s essential to identify a community that embraces your values. Further, you will want to work with a financial advisor to begin saving so that you will have the financial resources to make a more significant impact in the next stage. The earlier you strategically plan the more likely you are to achieve your goals.

The Outward Phase

During the outward phase, individuals are now often donating their time and money as a family or a business, having better established their careers and relationships. They realize that giving improves the quality of their life emotionally, intellectually, and financially. They become more active in the community and are often very engaged around causes of which they are passionate. In this stage, they can become more involved and really make a substantial impact by focusing primarily on one purpose, and they now have the financial resources to do so. Whatever their philanthropic endeavor, it is woven into the fabric of themselves and their family – an integral part of their everyday life, not just writing a check once a year. 

In this stage, you will want to identify where you believe you can make the most significant impact and work with your wealth advisor on how to do so for the long term. If you successfully planned for philanthropy in your early stages of financial planning, you now have the ability to say yes or no when asked to join or support a charity. Ideally, it is easy for you to say yes to the causes you are most passionate about because you have built it into your financial ecosystem. After careful planning, you will be well-positioned to allocate resources to your philanthropic passions.

The Legacy Phase

When people arrive at the legacy phase, it often accompanies retirement, which means that they have more available time and money than ever. The effect of their choices become more profound, as they think about the legacy they will leave behind. They can now dedicate excess resources in a deep-rooted way, such as building a foundation of their own or creating a donor-advised fund.

It is essential to work with a wealth advisor to build the right infrastructure around this stage. They will help you to understand whether or not to incorporate family members, how to do so, and how they may carry on the efforts after you are gone. You will need to look at the right governance, tax structure, education, and empowerment. Further, the right financial partner can manage and facilitate grants and will have the flexibility to govern and ensure that your passion lives on. 

Financial Planning for your Philanthropic Journey

Whatever phase of philanthropy you are in, it is wise to share your goals with your financial advisor and wealth management team to make it a part of your long-term strategy. The right partner can provide expert insights and understand that your values lead your life, and therefore have a place in your investment strategy.

At Shepherd, our ethos is “Live to Give” and is woven into the fabric of our firm. We not only have the financial management experience and history to help you on your journey, but we are living it for ourselves. I have personally lived through the first two stages and am now planning for the third. In my family’s outward phase, we have founded multiple foundations, including:

  • AbilityPLUS Adaptive Sports, providing adaptive sports lessons for people with disabilities who, along with their families and friends, have experienced the joy of inclusion in mainstream recreational activities. 
  • Gulf Coast Volunteers for the Long Haul, leading service trips to New Orleans after Hurricane Katrina.

My wife is also very active in the National Alliance on Mental Illness (NAMI), where she has helped train facilitators for multiple community centers, and we are very active members of our church.

We intimately understand the importance of a well-planned philanthropic journey. We want to help you build the best path for yours. We would be honored to serve you, so please give us a call today to learn how to get started.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

Investment advice offered through Shepherd Financial Partners, LLC, a registered investment advisor. Securities offered through LPL Financial, member FINRA/SIPC. Shepherd Financial Partners and LPL Financial are separate entities.