Philanthropic engagement is one of the line items in a divorcing couple’s life that gets less attention than it deserves. The substantive financial work — property division, support, retirement — consumes the energy of the engagement, and the giving plan often falls to the bottom of the list of things to be addressed. For couples whose philanthropy was structured at the basic level — annual donations to a defined set of charities — the postponement may be manageable. For couples whose philanthropy was more developed — donor-advised funds, family foundations, pledged commitments to capital campaigns, legacy society memberships, named funds at universities — the postponement creates real complications that compound the longer they go unaddressed.
Americans gave $485 billion to nonprofit organizations in 2021, per the Giving USA Study. The aggregate scale of charitable activity in the United States is enormous, and a meaningful fraction of it is conducted by couples whose engagement with the giving was joint and whose post-divorce engagement needs to be restructured. What follows is a working guide for Divorce Financial Coaches, family lawyers, financial planners, and estate attorneys helping clients develop new philanthropic identities after divorce, with attention to the structural questions that arise across both basic and more sophisticated giving plans.
Why the philanthropic conversation belongs in divorce planning.
Three reasons make philanthropy a topic the planning should explicitly address.
First, the existing giving structure was almost certainly built around the joint identity of the couple. The donor-advised fund is in joint title or in both spouses’ names. The foundation’s board lists both spouses. The legacy society membership recognizes the couple. The named fund at the university uses both names. When the couple divorces, these structures continue to exist with the joint framing even though the underlying relationship has ended. The structures cannot continue indefinitely without addressing the new reality, and the longer the addressing is postponed, the more awkward the eventual resolution becomes.
Second, the budget for ongoing philanthropy almost certainly changes with the divorce. The household that was operating on combined income may now be two households operating on separate incomes, with substantially less combined free cash flow. The giving budget that was sustainable as part of a joint household may not be sustainable for either ex-spouse individually. The planning needs to address what level of ongoing giving each ex-spouse can sustain and what adjustments to existing commitments may be necessary.
Third, the meaning of philanthropic engagement often shifts after divorce. The giving that was an expression of the couple’s joint identity may not feel right for either ex-spouse to continue exactly as before. New philanthropic interests may emerge as each ex-spouse develops their post-divorce identity. The planning conversation provides an opportunity to think about what each client genuinely wants to support going forward, rather than continuing inherited patterns by default.
Five considerations for couples with basic giving plans.
Couples whose philanthropy operated through direct gifts to a defined set of charities — annual donations to a few favored organizations, periodic special gifts in response to specific appeals, perhaps some recurring monthly giving — have a relatively contained set of decisions to make.
First, assess the giving plan and giving budget in light of the post-divorce financial picture. The Divorce Financial Coach or financial planner can run projections that show what level of ongoing giving each ex-spouse can sustain while meeting other financial obligations. The projections should account for the changed household-cost structure, the reduced cash flow, the support obligations (paid or received), and the long-term financial plan each ex-spouse is building. The output is a sustainable giving budget for each spouse going forward, which may be less than what the couple was giving together but is sustainable in the new circumstances.
Second, reach out to the charities each ex-spouse will continue to support with updated address and contact information. The charities’ records likely show the marital home address and possibly the joint household email or phone. Updates are needed for receipts, acknowledgments, tax documents, and ongoing communication. The update can also occasion a brief conversation with the development staff at the organization about whether the giving relationship should continue, on what terms, and at what level.
Third, check recurring giving programs and update payment methods. Many recurring monthly or quarterly gifts are tied to specific credit cards or bank accounts that may have been canceled or transitioned during the divorce. A recurring gift that fails because the underlying payment method no longer works produces an embarrassing lapse in the relationship with the organization. The audit should identify all recurring commitments and verify that the payment methods are current.
Fourth, discuss any pledges the couple has made and memorialize the agreement on how the pledges will be satisfied after divorce. Joint pledges to capital campaigns, multi-year commitments, or other defined obligations are technically the joint obligation of the couple. The divorce settlement should specify which ex-spouse will satisfy which pledges, on what timeline, with what consequences if the pledge is not paid. Pledges that go unaddressed in the settlement become recurring sources of friction post-divorce.
Fifth, reassess volunteer commitments alongside the financial giving. Many philanthropic engagements include volunteer involvement — board service, event participation, ongoing program support — that needs to be similarly reassessed in the new circumstances. The volunteer engagement may need to be reduced, reallocated between the ex-spouses, or refocused on different organizations as each ex-spouse develops their post-divorce identity.
Three considerations for couples with donor-advised funds.
A donor-advised fund (DAF) is a charitable account established at a public charity (a community foundation, a national DAF sponsor like Fidelity Charitable or Schwab Charitable, or a faith-based or cause-specific sponsor) into which the donor contributes assets, receives an immediate charitable deduction, and then recommends grants from the fund to operating charities over time. DAFs have become the most common formal giving structure used by upper-income and high-net-worth donors because of their administrative simplicity, tax efficiency, and flexibility. Many divorcing couples have meaningful DAF balances that need to be addressed in the divorce.
The first consideration: the DAF is typically titled in one spouse’s name (the donor of record) even though both spouses may have been involved in grant-making decisions during the marriage. The titled spouse has the legal authority to direct grants from the fund; the non-titled spouse has no legal claim to the fund regardless of how involved they were in the giving decisions. The structural question in divorce is whether the DAF should be treated as the titled spouse’s separate property going forward, whether some accommodation should be made for the non-titled spouse’s prior involvement, or whether the fund should be split.
Splitting a DAF is generally possible. The mechanics depend on the sponsoring charity’s policies, but most DAF sponsors will accept a transfer of a portion of the fund’s balance to a new DAF in the other spouse’s name. The transfer is technically a recommendation of a grant from one DAF to a charitable entity (the sponsoring organization, on behalf of the new DAF), which is permissible under DAF rules. After the split, each ex-spouse has their own DAF and makes independent grant decisions going forward.
The decision to split versus retain depends on the relative engagement of the two spouses with the fund, the dollar magnitude involved, and the practical question of whether each ex-spouse will maintain a separate giving program going forward. For funds where one spouse was substantially more engaged than the other, retention by the engaged spouse with appropriate offsetting allocation elsewhere in the settlement may make more sense than splitting. For funds where both spouses were deeply engaged, splitting often is the right answer.
After the split (or after the retention decision is made), each ex-spouse should review their own giving plan and grant-making strategy. The DAF that may have been operating with grants to a defined list of charities under joint decision-making now needs an independent plan reflecting each ex-spouse’s continuing interests. The Divorce Financial Coach or financial planner can support the development of the new plan.
Family foundations — the more complex structure.
A family foundation is a private foundation typically established to give the family more formal control over their philanthropic engagement. Foundations are more complex than DAFs in administrative requirements (annual tax filings, required minimum distributions, prohibited transaction rules, excise tax considerations), but they provide greater flexibility and control in exchange. Many high-net-worth families establish foundations to support significant philanthropic engagement across generations, with family members serving as board members and grant-making participants.
When the couple establishing the foundation divorces, several structural questions arise. The foundation’s governing documents (articles of incorporation or trust agreement, bylaws) define who has authority to make decisions and how board members are appointed and removed. The divorce settlement needs to address how these structures will evolve.
Three options recur.
Negotiating for one spouse to maintain the foundation. The simplest approach: one ex-spouse continues to operate the foundation, the other ex-spouse resigns from the board and relinquishes any control. The remaining spouse continues the foundation’s existing mission and grant-making. The relinquishing spouse may receive offsetting allocation elsewhere in the settlement to reflect their prior contribution to building the foundation’s endowment. The approach works when the spouses can agree on which of them is the natural continuing operator and when the relinquishing spouse is satisfied with the offset.
Splitting the foundation into two foundations. The foundation’s assets are divided between two new foundations, each operated by one of the ex-spouses going forward. The split requires legal and tax work — the existing foundation cannot simply be divided as if it were a checking account. The mechanics typically involve forming a new foundation, transferring a portion of the existing foundation’s assets to the new foundation under provisions that qualify as a permissible transfer between private foundations, and ongoing operation of both foundations independently. The split adds substantial administrative complexity (two foundations require two sets of governance, two tax filings, two minimum distribution calculations) but allows both ex-spouses to continue their philanthropic engagement at the foundation level.
Terminating the foundation by distributing its assets to one or more charities. The foundation’s assets are distributed to operating charities the founders want to support, the foundation is wound down, and the philanthropic structure ends. Termination is the cleanest end-state but eliminates the family foundation’s ongoing role in the family’s philanthropy. Termination may be appropriate when neither ex-spouse intends to continue the foundation’s mission, when the foundation’s endowment is too small to support continued operation across two separate foundations, or when the family’s broader interests favor distributing the assets immediately rather than maintaining the foundation.
The Bill and Melinda Gates Foundation announcement during their 2021 divorce illustrates the complexity of the foundation question for high-profile cases. The Gateses announced they would continue to work together at the Foundation, with Melinda agreeing to resign as co-chair and trustee if, after two years, either one of them decided they could not continue to work together. The deferred-decision structure provided a transition period during which the Foundation could continue its work without immediate disruption while preserving the option to restructure if the joint operation proved unsustainable. The specific structure was unique to the Gateses’ situation; other families would face different practical options.
Foundation splits and other restructuring transactions require tax and legal advice from professionals with specific experience in private foundation transactions. The rules governing permissible foundation transactions are intricate and include several traps for the unwary, including potential excise taxes on improperly structured transfers and prohibited transactions with disqualified persons (which can include divorced founders). The work should not be undertaken without specialized counsel.
Planned giving commitments and named recognition.
Many couples have made planned giving commitments to organizations they support — charitable bequests in estate planning documents, charitable remainder trusts naming the organization as remainder beneficiary, charitable beneficiary designations on retirement accounts or life insurance, named funds at universities or medical centers, named buildings or programs, legacy society memberships. Each commitment requires review in the divorce.
Charitable bequests in estate planning documents need to be reviewed and potentially updated. The bequest in the joint trust or in the individual will may need to be modified to reflect each ex-spouse’s individual intentions going forward, with appropriate updates to the underlying documents. The estate planning attorney should be involved alongside the divorce attorney in reviewing the relevant documents and making the updates.
Charitable beneficiary designations on retirement accounts, life insurance, and other instruments need to be reviewed. The designations made during marriage may need to be updated to reflect each ex-spouse’s separate intentions. As with all beneficiary designations, the audit should cover every account and policy where a beneficiary can be designated.
Named recognition — the legacy society membership, the named fund, the named building or program — may need to be addressed with the receiving organization. Even if the underlying bequest still reflects current intent, the organization may need to be notified of the divorce. The couple may not wish to continue being recognized as a couple, particularly if the recognition was prominent (a named building, for example, that bears both names). The organization can work with the family to update the recognition appropriately.
The conversation with the organization about named recognition can be uncomfortable but is generally received with appropriate sensitivity by sophisticated development professionals. The organization wants to maintain the relationship with both ex-spouses and to honor their respective ongoing engagement; they generally have experience navigating these conversations and can suggest workable structures.
Tax planning around post-divorce charitable giving.
The tax structure for charitable giving changed substantially after the 2017 Tax Cuts and Jobs Act and continues to evolve. The doubled standard deduction reduced the number of taxpayers who itemize, which in turn affected the tax benefit of charitable giving for many donors. For divorcing clients, the post-divorce tax position may differ substantially from the marital tax position, and the planning around continued giving should reflect the new context.
Three planning considerations recur. First, the bunching strategy — concentrating multiple years of giving into a single year to clear the standard deduction threshold — may make more sense for individual filers than it did for the marital couple. The Divorce Financial Coach or financial planner can model the timing of charitable contributions to maximize the tax benefit.
Second, gifts of appreciated assets remain tax-favored — the donor avoids capital gains tax on the appreciation and receives a charitable deduction for the fair market value (subject to AGI limits). For divorcing clients who received appreciated assets in the property division, donating a portion of the appreciated assets can be both tax-efficient and a way to convert paper gains into philanthropic impact without the cash-flow strain of giving from current income.
Third, qualified charitable distributions (QCDs) from IRAs after age 70½ allow direct transfer of up to $105,000 per year (indexed) from the IRA to a qualified charity, satisfying required minimum distributions without including the distribution in taxable income. For older divorcing clients, the QCD can be a tax-efficient way to maintain charitable engagement without producing taxable income.
Establishing the new philanthropic identity.
Beyond the mechanical work of restructuring existing commitments, the divorce provides an opportunity to think about what each client wants their post-divorce philanthropic engagement to look like. The conversation can be among the most generative parts of the broader engagement because it invites the client to articulate their values, their interests, and the impact they want to have in the world.
Several questions can structure the conversation. What causes have always mattered most to the client? What new causes have emerged as the client has developed in recent years? Where does the client want to see their philanthropy have impact — local, national, international? What level of engagement does the client want — passive financial support, active engagement with grantees, leadership of philanthropic initiatives? What time horizon — annual giving, multi-year commitments, lifetime gifts, testamentary giving?
The answers shape the structure of the post-divorce giving plan. A client whose answers point toward modest annual giving to a defined set of local organizations needs a different giving structure than a client whose answers point toward active leadership of an issue area. The Divorce Financial Coach or financial planner can help translate the answers into a working giving plan with appropriate timing, structure, and tax integration.
How VennBoard supports philanthropic planning across the divorce engagement.
Philanthropic planning intersects with the broader financial planning, the estate planning, and the tax planning of the divorce engagement. The infrastructure that supports the integrated planning supports the philanthropic dimension when it is built into the workflow.
VennBoard’s matter workspace can hold the philanthropic structures and commitments alongside the broader financial picture. The DAF balances, the foundation structures, the bequest provisions, the recurring giving commitments, and the planned giving structures all live in the matter with appropriate tagging. The post-divorce giving plan that the engagement develops becomes a structured artifact that supports ongoing decision-making rather than living in a separate document that gets lost over time.
Two operational features matter most for philanthropic planning that extends beyond decree. The shared expense tracking can support ongoing pledge fulfillment when both ex-spouses continue to have responsibility for joint commitments, producing clean records of who paid what and when. The audio and video transcribe tool captures the planning conversations about philanthropic identity, which becomes valuable as the client refines their giving plan over the years following the divorce.
Philanthropic engagement is one of the areas where the divorce can be the catalyst for clarification rather than disruption. The right planning conversation turns the divorce into an opportunity to develop a more intentional giving identity. VennBoard exists to support the engagement that produces this outcome. Professional walkthrough at VennBoard.com, product detail at VennBoard.com.