Philanthropy & Charitable Giving

Charitable giving requires more consideration than simply diverting a number of funds to a 501(c)(3) organization. Our CERTIFIED FINANCIAL PLANNER™ professionals will assess your financial resources and develop a personalized strategy to help you reach your donation goals in a tax efficient manner. We’ll determine what methods of giving are wise options for you and help you decide on how much you should give.

In addition to outright gifts of cash, securities, and personal property, you may want to consider more advanced options, including:

• Donor-advised funds (DAFs) — A DAF is a charitable giving option in which a public charity is created to manage charitable donations on your behalf. When you donate funds to a DAF, you receive an immediate tax deduction. The DAF holds the funds until you direct it to give grants to charitable organizations. Many institutions like mutual funds offer this as an inexpensive option.
• Private foundation — Instead of giving to directly to a not for profit, you might want to start your own instead. You can set up a private foundation registered as a nonprofit often using your family name. Each year grants are made from the private foundation to ensure your funds go toward the area of need that is important to you.
• Charitable remainder trust (CRT) — A charitable remainder trust is a tax-exempt, irrevocable gift to charity that reduces your taxable income. However, the CRT disperses income to the beneficiaries, including perhaps yourself, for a specific period and the remaining funds are distributed to the designated nonprofit organization(s).
• Charitable lead trust (CLT) — A charitable lead trust is like the reverse of a charitable remainder trust. After establishing the CLT and funding it, for which there is no deduction, the CLT pays the income from the trust to a nonprofit. The income payment does create a tax deduction each year. After a specified period, the assets in a CLT revert to the donor or some other beneficiary.
• Charitable gift annuity (CGA) — In a charitable gift annuity, the donor transfers assets to a charitable organization. In return, the donor receives a stream of income from the charitable organization for a specified period. Because the donor retains some interest in the donation through the income payments, the tax deduction is not 100% of the money donated. Donations in a charitable gift annuity are irrevocable.
• Pooled income fund — A pooled income fund is set up by a nonprofit in which non-related donors pool their money. The fund is invested on behalf of the donors who share proportionately in the income generated by the fund during the donor’s lifetime. A death, the donor’s portion of the fund reverts to the charity.