Making an Impact with a Charitable Giving Strategy

By Marc C. Shaffer

Charitable giving can be done at any level, and it takes all types of donors for charitable organizations to survive.

Many donors find themselves with a desire to give, and then make their donations based on their ability to give. But, moving beyond the desire and ability to creating a strategy for giving that is part of your financial plan may help you give more.

According to Giving USA’s 2021 report, approximately $471.44 billion was given to U.S. charities in 2020, which was up 5.1 percent from the previous year. This giving was done in the form of individual donations, bequests, foundations and corporate giving.

Understanding where and how you’re giving can help you visualize your current impact and help while you’re developing a strategy for maximizing these gifts.

There are some decisions to make as you design a charitable giving strategy.

These could include:

  • What motivates me to give?
  • Does my charitable purpose match my partner’s or do we have different goals? Are we giving equally to shared values?
  • Will I give to multiple organizations or will my giving be more focused?
  • Is there due diligence I need to perform on the charities I am interested in helping?
  • What is my budget for giving?
  • Will my strategy be similar each year, or will it change?
  • Am I interested in creating a strategy that is fulfilled both during my lifetime and upon my death?
  • How and what will I give?
  • Does my company have a matching program that I can take advantage of?

You may consider gifting appreciated assets and appreciated stock shares. There are opportunities for deducting the stock’s fair market value from your taxes and if the charity is tax-qualified, they may also benefit in the future by not facing capital gains tax on the stock when it is sold.

Where Does Cash Fit In?

Think about weekly cash donations you may be giving, monthly events you may be sponsoring monetarily, one-time gifts you may be making and all of the other ways you are supplying cash to charities you care about.

When you give substantially throughout the year and are only doing so with cash, you may be missing out on the opportunity to reduce your tax liability. If you gift cash, you will want to understand the deduction limits and realized tax savings.

Don’t forget about volunteering! Even if you don’t have funds for every organization you care about, your volunteer hours can be just as valuable. You can even get the family involved in choosing volunteer projects!

Working with a financial planner who understands your desire to give can help you make charitable giving part of your plan. What works best one year and fits with current tax rules could change the next year if the rules are changed. You will also want to discuss how your strategy may change throughout the years, if you want to continue giving during retirement, and legacy planning if you want to give upon your death.

It can be beneficial to have someone looking out for these changes and helping you make adjustments to continue maximizing your giving.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.  

Published for the blog on November 29, 2021 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.