{"id":4085,"date":"2019-12-01T00:15:00","date_gmt":"2019-12-01T00:15:00","guid":{"rendered":"https:\/\/fusionwm.com\/?p=4085"},"modified":"2022-10-13T00:23:38","modified_gmt":"2022-10-13T00:23:38","slug":"charitable-giving-the-tax-wise-way","status":"publish","type":"post","link":"https:\/\/fusionwm.com\/charitable-giving-the-tax-wise-way\/","title":{"rendered":"Charitable Giving, the Tax-Wise Way"},"content":{"rendered":"\n
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Americans\u2014especially the affluent\u2014are some of the most charitable people in the world.* Chances are, you use some of your wealth to support favorite causes or organizations that are important to you.<\/p>\n\n\n\n

Unfortunately, your contributions may not be having as big an impact as they could\u2014and you could be missing out on some valuable charitable tax benefits that may help both you and your favorite charities.<\/p>\n\n\n\n

Here\u2019s how to size up the effectiveness of your giving\u2014along with some strategies that could potentially put some real power behind your philanthropy.<\/p>\n\n\n\n

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The state of affluent giving<\/h1>\n\n\n\n

In a survey of 204 affluent individuals (those with investable assets of $500,000 or more), about three-quarters said they make significant charitable contributions every year (see Exhibit 1).<\/p>\n\n\n

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* Karl Zinsmeister, The Almanac of American Philanthropy<\/em>, The Philanthropy Roundtable, 2017.<\/p>\n\n\n\n

However, few of those donors are using tax-efficient strategies as part of their annual giving efforts (see Exhibit 2). In fact, only about one in five is doing more than simply writing checks to charitable organizations each year.<\/p>\n\n\n

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The good news:<\/strong> There is strong interest among the affluent to learn more about ways to give more strategically and more tax-efficiently (see Exhibit 3). The reason for the gap between interest in tax-efficient giving strategies and the use of such strategies is likely that affluent donors aren\u2019t being educated enough about alternative ways to give.<\/p>\n\n\n

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Tax-efficient giving<\/h1>\n\n\n\n

Simply put, tax-wise charitable planning is the process of making a significant charitable gift (either during the person\u2019s life or at death) that is part of a financial or estate plan\u2014and doing so as tax-efficiently as possible.<\/p>\n\n\n\n

Tax-wise charitable planning is usually best accomplished as part of an overall wealth plan that addresses other key issues such as wealth transfer, wealth protection and cash flow needs. When affluent donors can take into account the various assets they have and how they are structured, there is the potential to make meaningful charitable gifts that also provide meaningful tax benefits. Generally, proactive wealth planning that takes an affluent donor\u2019s broader financial situation into account can lead to much better outcomes than can so-called checkbook philanthropy, in which charitable gifts are made out of cash flow.<\/p>\n\n\n\n

Important:<\/strong> Effective tax-wise charitable planning focuses first on a person\u2019s philanthropic agenda and then on how to be as tax-efficient as possible (see Exhibit 4). The intention to use wealth to achieve charitable goals is the most important component of the process.<\/p>\n\n\n

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Tax-wise charitable planning strategies<\/h1>\n\n\n\n

There are many ways, beyond simply writing checks regularly, to make charitable gifts. Three of the more commonly used approaches are:<\/p>\n\n\n\n