Charitable Giving with Purpose Magnifies Your Gifts

Samantha Veith |

Most people of conscience, especially those who have done well for themselves, want to use their resources to do some good in the world. The problem is, as I’ve observed with many of my clients, their charitable giving tends to be somewhat haphazard, often centered on tax considerations; and many times it’s an emotional response that may or may not have the intended impact if at all. It’s not uncommon for some people to gift thousands of dollars each year – but for the sake of what? For what purpose? Sure it might make them feel better, for the moment, but is it having the optimal impact it could have for both the benefactor and the beneficiary? Are you giving with clarity of purpose or are you simply checking off your to do list?

For the best possible experience and outcome, charitably-minded clients should create a charitable giving plan, not unlike an investment plan, replete with a policy statement with clearly defined goals, a well-conceived strategy, and specific action plans. In doing so, their giving becomes more strategically-focused with a built-in firewall to protect against unwarranted charitable requests by professional solicitors or opportunistic relatives. But the real benefit of such a plan is it optimizes your giving to more fully benefit intended causes and magnify your benevolence. It’s clearly a much more meaningful win-win for all concerned.

A charitable giving plan begins with a policy statement that clearly articulates your goals, your intentions, and your criteria for selecting recipients. By starting at a high-level and identifying the types of causes you want to support, such as the environment, religious causes, education, poverty, research, the arts, etc, you will begin to develop some clarity in your purpose for giving. Articulating what’s important to you and why will solidify the purpose and help you to prioritize your grants. With that, you will be able to allocate your annual gifts by percentage according to these charitable giving classes – not unlike allocating your investments among specifically selected asset classes. When you determine a number – that is, the amount you want to give in a particular year – that amount can then be allocated among the various causes based on your pre-determined percentages.

The next step is to identify specific non-profits or charitable organizations within each class that best reflects your goals and offers the best opportunities to amplify your intentions. This is the part that requires some research, but once you’ve identified the most deserving organizations, they become part of your annual strategy and you can set it and forget it. Of course, most Marin County financial planners recommend that you review your recipients every few years to evaluate how well they are performing in their management of your gifts.

Become the Benefactor You Want to Be

Most people have never considered the need to develop a full-scale charitable-giving plan. But then, most people have yet to make it to the level where they have the opportunity to give large amounts of money. You have, and it’s only right that your hard-earned money create the maximum charitable foot print while serving a purpose you hold near and dear. You’ll feel better about your giving, which means you’ll probably want to give more, and then everyone benefits.

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2022 Advisor Websites.