Following the advise of
a qualified Financial Planner can help families get the most benefit from their
charitable donations. Here are some strategies that enable you to maximize the
value of your charitable donation, get the full deduction allowed and save you
money on taxes.
Know your Budget
American families are
very generous when it comes to Charitable giving. The average household donates $2,564 per year or roughly 5%
of their income.
Upper Income families
donate even more on an annual basis.
Surprising though, for what is likely one of the larger investments to
be made each year, few families plan ahead about where or how they plan to
donate. Set a budget for giving and stick to it.
Join a Giving Group
Giving with a group is a
smart way to have a larger charitable impact. Giving Circles allow people to join groups to pool donations
to support particular causes and organizations. Your donation of $500 is compounded
by 10 or 50 and the total donations together can have a much greater positive
impact for the recipients of the gift.
Get Employer Matching
Funds
Asking your Company to
set up a matching Funds Program is a smart way to boost the impact of your
donations. Many Employers will
make charitable gifts as long as the cause meets with the Company’s giving
guidelines.
Don’t Write a Check-Give
Shares Instead
Many people are surprise
to learn the benefits of gifting shares from their stock portfolio over writing
a check. Our US Tax system rewards
donors who give securities instead of cash. These donors will not have to pay taxes on the capitol gains
earned by their investment, and they get a full charitable deduction for the
total value of the stocks that they Gift.
By giving shares, the
nonprofit Charity can sell them without paying any taxes. You can take a Deduction for the full
value of the shares and save by not having to pay the capitol gains tax. Smart financial planning.
Donor-Advised Funds –
Not just for the Wealthy
Setting up your own
family mini-foundation is not difficult or time consuming. There is no prior
approval needed from the Internal Revenue Service. Families can name the
foundation and establish their own guidelines for giving. These foundations make good sense even for
Families giving as little as $5000 a year.
The greatest advantage
of the Donor-Advised funds is that they allow the donor to take the full tax
deduction this year, yet dole out the money on their own schedule over the next
months or even years.
