{"id":3816,"date":"2021-10-01T15:06:00","date_gmt":"2021-10-01T15:06:00","guid":{"rendered":"https:\/\/fusionwm.com\/?p=3816"},"modified":"2022-10-05T15:13:28","modified_gmt":"2022-10-05T15:13:28","slug":"feeling-philanthropic-a-charitable-planning-primer","status":"publish","type":"post","link":"https:\/\/fusionwm.com\/feeling-philanthropic-a-charitable-planning-primer\/","title":{"rendered":"Feeling Philanthropic? A Charitable Planning Primer"},"content":{"rendered":"\n
\"Feeling<\/figure>\n\n\n\n
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Do you want to have a major impact on a charity or cause that means a great deal to you? Do you want to do well financially by doing good for others in need? Do you want to leave your mark and maybe even \u201cmake a dent in the universe\u201d as Steve Jobs once talked about?<\/p>\n\n\n\n

If so, you\u2019ve got plenty of company.<\/p>\n\n\n\n

In our experience, one of the top five key financial issues we hear about from today\u2019s affluent individuals and families is charitable giving\u2014how to do it well, and how to do it better. And when we asked 247 highly successful business owners why they wanted to be wealthier, 71.3 percent\u2014nearly three-quarters\u2014told us they wanted to build additional wealth so they could be more meaningfully supportive of charitable causes.<\/p>\n\n\n\n

We all know the best results usually come from the best plans\u2014it\u2019s uncommon to randomly stumble into a great outcome!<\/p>\n\n\n\n

That also holds true when it comes to philanthropy.<\/p>\n\n\n\n

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Charitable planning defined<\/h1>\n\n\n\n

Charitable planning<\/em> is the process of making a significant charitable gift, during your life or at death, that is part of a broader financial or estate plan and takes the bigger picture into account. In contrast, a single charitable donation made from your current cash flow this year may be a gift\u2014but it\u2019s not a planned gift as we define it.<\/p>\n\n\n\n

Smart giving is usually best accomplished as part of your overall financial situation. By considering the various assets you have and how they are structured, you can plot out a path to results that are very worthwhile to all parties involved\u2014including you, your family, your business (if you own one) and the charitable organization. To get those results, charitable planning is often coordinated with estate or income tax planning that uses advanced legal and tax strategies and\/or financial products.<\/p>\n\n\n\n

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Eight ways to give<\/h1>\n\n\n\n

Philanthropy can take a number of forms. Generally speaking, charitable gifts provide you with a financial benefit on top of tax deductions\u2014benefits that were put into the tax code specifically to encourage charitable giving.<\/p>\n\n\n\n

The best first step in your planning efforts is to understand the charitable giving landscape, as there are many ways to accomplish charitable giving. For example:<\/p>\n\n\n\n

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Option #1: Will bequest<\/h1>\n\n\n\n

This is the simplest gift\u2014and the one that is by far the most common among those who have already made a planned gift. Through a will bequest, you leave a charitable gift in your will, and the gift does not go to the charity until the will is probated.<\/p>\n\n\n\n

A will bequest meets the personal needs of many people, and it does not require a great deal of involvement during your lifetime. Also, a will bequest does not require a lot of administrative oversight; the estate simply pays out the designated amount to the charity during the probate period. What\u2019s more, will bequests are convenient because the assets are still available to you during your lifetime. Your estate is also able to take an estate tax deduction for the value of the charitable bequest.<\/p>\n\n\n\n

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Option #2: Private foundation<\/h1>\n\n\n\n

This is a private, nonprofit organization that receives most of its contributions from a single wealthy individual or family (usually very wealthy). With a private foundation, a minimum amount of the foundation\u2019s assets must be distributed annually (currently about 5 percent).<\/p>\n\n\n\n

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Option #3: Donor-advised fund (DAF)<\/h1>\n\n\n\n

Think of DAFs as charities that invest in pooled investment vehicles similar to mutual funds. What you donate earns a federal income tax deduction for the entire gift, because the DAF is technically a nonprofit. You can, at your own pace, pinpoint certain charities and decide how much to give to each one. You can then request that the fund send a check to your chosen organization.<\/p>\n\n\n\n

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Option #4: Charitable trust<\/h1>\n\n\n\n

For many people with wealth and strong charitable intent, charitable trusts are extremely attractive planned gifts. There are two types of charitable trusts:<\/p>\n\n\n\n