Your organization is attracting the right kind of donors for financial stability!

Congratulations! Based on your answers, you are giving strategically to the benefit of both your own financial legacy and the charitable organizations you support. By smartly taking advantage of charitable-giving tax breaks, diversifying your portfolio while doing so, and enlisting the support of a professional financial advisor to guide your decisions, you have secured your financial future and ensured a positive impact on your community well into your retirement years and beyond. Keep up the good work.

Next Steps

Continue making your legacy count with these three charitable-giving strategies:

Charitable gift annuity
A charitable gift annuity is a simple way to supplement your retirement income and get a current tax deduction.Basically, in its simplest form, you turn over cash. It can be other property, but let’s say you have money in a certificate of deposit, and today you are earning less than one percent. If you are around age 65, you could take that out of the bank, buy a charitable gift annuity and immediately increase that income more than fourfold.The income goes up substantially for the rest of your life and you get a current income-tax deduction based on your age. Eventually that money will go to charity, so you should make this decision in the context of other elements of your financial plan. But if you need income, that’s a simple way to do things. It is going to pay income for as long as you and your spouse live. You will get a substantially better payment than you would with CDs, which historically have failed to keep up with inflation. And you also get a tax deduction. But when you and your spouse pass on, the money goes to charity. That’s why you’re getting the tax deduction.
A gift of stock
Another strategy that people use is the gift of stock. Let’s say you have a gain in a stock. You could sell it, pay the tax and make your gift to charity with the cash. But instead, you could choose to make the stock itself your gift to charity. You get the full benefit of that gift as a tax deduction without paying the capital gains tax. You are getting tax leverage there.In other words, you might have paid $500 for the stock, and it is now worth $1,000 and you give it to charity. That’s a full $1,000 deduction. Let’s say 20 or 30 percent of that will be coming back to you due to the smaller tax bill. You get that full deduction for your gift without having to pay the capital gains on a stock that doubled in value.
Donor advised fund
Make sure your family continues to weigh in on charitable decisions while you are alive and long after you are gone with a donor-advised fund. Family members can get together each year and talk about a certain amount of money in a donor-advised fund (or in a trust or in a foundation) that will be given away. They can examine questions such as what the charity is doing with the money, why the family should give the money to that particular charity, how this money has been invested, whether the charity or the financial institution that is handling the investment is doing a good job and how the family knows this, and what the metrics are. This is a great way to get the whole family involved in making a lasting legacy.

Read my book Finding Your Money’s Greater Purpose: How to Make Your Legacy Count for more insight.

Share Your Experience

We’d love to hear how your charitable organization is making a lasting impact on the world. Follow me on Twitter at @PatRenn and use the hashtag #MoneysGreaterPurpose to join the conversation!