Planning Your Philanthropy

At year’s end, many people find themselves rushing to make last minute charitable contributions. Often, the intent of helping out an organization is lost when a deadline looms. Since we’re just beginning the year, it is a good time to create a charitable giving plan so that your gifts will have the most impact.

There are many ways to support a charitable or non-profit organization other than simply writing a check. You can gift shares of stock which have a low cost basis. You will receive a tax deduction for the market value of the shares but do not have to pay tax on the gain from the sale. Many of our clients do this by transferring stock directly from their Fidelity or Schwab account to their church, alma mater or other organizations they wish to support.

Another way to gift highly appreciated assets is a Charitable Remainder Trust (CRT). With a CRT you can receive an income for your life (and your spouse’s) and a charity will receive what is left. You get to choose the amount of income you will receive annually (typically 5-10%). You can maintain control over how the assets are invested, receive a tax deduction in the year you make the transfer of assets to the trust and no capital gains are due on asset sales because you are benefitting a charity.

To make an impact without a personal financial contribution, there are many organizations that hold marathons, triathlons, bike races or walks in which you can take part and raise money. I have personally raised over $6,000 in the past two years for the Leukemia and Lymphoma Society by participating in two half marathons through their Team in Training program. This is a great way to get in shape and support a cause close to your heart.

If you would like to support our local community, The Greater Cincinnati Foundation provides several ways to do this by making grants in arts and culture, community and economic development, education, environment, health, and human services.

An alternative if you want to make a contribution in a certain year for tax reasons but do not have a specific cause in mind is a Donor Advised Fund. Both Schwab and Fidelity have Donor Advised Funds. They allow you to make a contribution, take an immediate tax deduction, direct how the assets are invested for tax-free growth and then recommend which non-profit organization(s) receive funds either today or in the future.

After retirement, a great way to give back to your community and stay active and healthy is volunteering. We have clients who contribute their talents to build houses through Habitat for Humanity, visit hospitals with their therapy dog, have gone on mission trips to do dozens of daily surgeries on animals in need, have traveled with Operation Smile to restore the smiles of children with cleft lips and palates , and are active in Kindervelt, which supports Children’s Hospital Medical Center. If you want to volunteer but do not have a particular organization in mind, a good place to start is www.volunteermatch.org.

No matter what organization you support with your time or money, you should do the research to ensure they are good stewards of their money. Charity Navigator is an independent source to research a charity’s financial health and how their funds are allocated.

I’ve touched on only a few of the ways you can support non-profit organizations. And, as you can see, being philanthropic does not have to involve vast sums of money. There are ways that everyone can give back. We are happy to help you determine your best avenue for giving, based on your charitable intentions.

Christine L. Carleton, CFP®
clcarleton@taaginc.com
http://taaginc.com/