Wealth Management Blog

Posts published in November 2017

Being Smart When Giving to Charity

By JJ Burns

November 14, 2017

There are many ways making donations can reduce your taxes, but how do you start a planned giving strategy? Which charities should you support? What type of assets should you donate? These are questions to consider. It’s also important to make sure your donation aligns with your values and fits in with your overall financial picture.

Giving to charity can often begin with something close to your heart. For instance, this year JJ Burns & Company participated in The Leukemia & Lymphoma Society’s (LLS) Light the Night Walk in honor and memory of my late father, James Burns.

He was a police officer and the day he sat down and showed me those blood test results it started a journey that changed my life. Through the darkness, LLS brought light and supported our family and especially my dad. Now we support this organization that touched our lives so personally.

Choosing Causes

Participating in an event like this is only one way to make a donation. There are many causes to support. Write down what matters to you. Think about things close to your heart you feel are important. Involve the whole family. Make a list, then select three or four ideas to start. Now think about what impact you would like to make for these causes.

Choosing Charities

Begin with more familiar groups. You can shift or expand your contributions as you become more comfortable with other organizations and as you define your financial goals. Start with charitable information services such as GuideStar.org, the BBB Wise Giving Alliance (Give.org), and CharityNavigator.org. Some allow you to review data, while others provide ratings for charities.

Tax Considerations

Time and money are not the only ways to make a donation. You can leverage your gift to support the charity and help you for the most tax benefit at the same time. Using our collaborative wealth management approach, we can work with your accountant to help analyze and explain your options.

Timing Donations

Spread your donations throughout the year. This gives more time to evaluate the charities—and more time for the organizations to process your paperwork. If you have special requests or require appraisal before transfer, processing will likely be easier and quicker before the end-of-year rush.

Giving Options

Donor Advised Fund (DAF)

Are you just donating cash, or are you also considering stocks and other financial instruments? One way to increase your donation options and help create more tax benefit for yourself is with a donor-advised fund (DAF). A DAF is established at a public charity. You make contributions as often as you like and receive an immediate tax benefit. The gifts can be invested and grow tax-free. Over time, you recommend grants from the DAF account.

Annuities (CLAT & CRAT)

A charitable lead annuity trust, or CLAT, pays a charity a set amount of money over a period of time. At the end of that period, any remaining money is paid to you or your family and are free from gift and estate taxes.

A charitable remainder annuity trust, or CRAT, is the opposite. It pays you and your family a set amount over a period of time. The charitable organization receives the remaining money at the end of the period.

Activating Your Plan

Take all your notes to your financial team. At JJ Burns, we will review your ideas and see how to help you meet your wealth management goals, while also supporting the causes you feel passionate about. By collaborating with all members of your financial circle, we can help you maximize your impact and work toward your greater good.