Tips for Charitable Givers

As equity market growth has given individuals larger unrealized gains and spurred an outpouring of donations, charitable giving jumped 28 percent last year among wealthy households.  Below are tips for working with clients on their philanthropic goals:

• Start with the tax return.  The easiest way to tell if someone is charitably inclined is to review their tax return.
• Size doesn’t matter. “We have people who give away $1 million a year and some who give away $5,000.”  Even the smallest amounts can have a direct impact.
• Don’t wait for the estate plan. People may enjoy watching the good their money can do right away, instead of waiting until they pass to give the money away.
• Focus on appreciated assets. Giving appreciated assets such as stock or property is preferable to giving money directly because it takes taxable assets out of an estate, which gives people a tax break.
• Consider charitable lead trusts. This enables the charity to receive income off the trust for several years.
• Consider family foundations. Use these only if you plan to fund one with at least $5 million because the expense of running a foundation can be costly.

See Ann Marsh, 17 Charitable Tips for the Wealthiest Clients, Financial Planning, Dec. 1, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.