The Minneapolis Foundation talked recently with Clint Schroeder, a principal at Gray Plant Mooty, renowned expert on charitable planning, and former board chairman of the Foundation. Schroeder explained how he helped one client double a gift to Yale University—and why he believes that financial advisors owe it to their clients to talk about charitable giving.
Foundation: You’re considered legendary for encouraging clients to consider charitable giving a primary part of the estate planning process. Why have you put such an emphasis on this in your practice?
Clint: Well, I began as a tax lawyer. I had a degree in accounting, plus my law degree, and early on I was fortunate to work with a couple of clients who had already made some provisions for gifts to charities, particularly colleges. I discovered that by advising clients to plan simultaneous gifts to family members and gifts to charity, it was possible to achieve some very significant positive results for everyone. As the clients were providing for their own families, they could use charitable gifts to produce income tax savings that offset gift or capital gains taxes. It was the combination of the two that often solved cash flow problems, minimized taxation, provided increased income, and also provided good to the public through the charity. To this day, the approach produces great benefits.
Foundation: Can you give an example of a client who did this?
Clint: I’ll give you a very early example. In 1962, I recommended to a client that if he were only to take the gift that he had in his will and move it up into his lifetime, he could get both income tax savings and estate tax savings. By doing so, he was able to double the amount of the gift that he had provided to his alma mater, which was Yale. As a result, I ended up participating in the creation of the first charitable remainder trust that benefited Yale University. It was that experience that convinced me, boy, there are really opportunities here!
Foundation: How has charitable planning changed over the course of your career?
Clint: It has changed tremendously. In 1969, Congress passed a law called the Tax Reform Act. For the first time in the Internal Revenue Code, they defined several charitable planning methods that some of us had been using. One was the charitable remainder trust. Another—and this is one of my favorite gift methods—was the charitable gift annuity. That law provided a roadmap where anybody could look at the code and create these programs and combine family benefits with charitable benefits. After that, charitable planning just blossomed.
Foundation: the Minneapolis Foundation is celebrating its 100th anniversary this year. As a former chairman and longtime trustee, you’ve been connected to the Foundation for at least 30 of those years. How did you first come to work with us?
Clint: The Foundation was created in 1915, and the way they structured the board initially was to designate several community institutions or positions that would be able to nominate a person to the board. For example, First National Bank could nominate one person. I was the person designated in 1985 by the Hennepin County chief judge. I had already been using the Foundation as a trustee for some of the trusts that I used to set up for my clients, so it was a natural fit with my work.
Foundation: How has the Foundation evolved over the years?
Clint: It’s grown substantially. It’s now performing a more significant role in the life of our community because it’s dispensing millions of dollars every year to assist nonprofits and disadvantaged people in our community.
Foundation: What advice would you give to attorneys or financial advisors about how to talk about charitable planning with their clients?
Clint: My primary advice would be that they really should educate themselves on how these two areas—estate planning and charitable planning—can mesh together. I think that people are really shortchanging their clients if they don’t introduce at least the possibility of using charitable giving as part of the estate planning process. Frankly, it allows a family to accomplish more for themselves and the community than if they just focused on estate planning.
Clint Schroeder has been practicing as a tax lawyer for many years with a focus in the charitable giving and trust & estates areas. He has earned countless awards and accolades for his contributions to the charitable giving community, which include speaking at educational events, writing for local and national publications, and working with charitable institutions and donors. In 2008, he received the inaugural Clinton A. Schroeder Distinguished Service Award from the Minnesota Planned Giving Council.