Does Your Family Need a Giving Plan?

May 13th, 2016 by Anchor Bay Capital's Investment Team

On a routine drive to the store the other day, I asked my 9-year-old daughter what her and her friends were talking about at school.  I listened as she said that her friends all know about the presidential election in the news lately. We talked about what she hears in the news and how she feels about the different personalities. She shared her and her friends’ concern about what the world will be like with a new president and the changes that come with a shift in politics. As we talked, the conversation transitioned to a reflection on the freedoms that we enjoy and the exceptional life that we live compared to a large part of the world. She felt lucky that she has the opportunity to develop her talents, work hard and be rewarded for her efforts as she chooses. It was a great moment to see how a child understands how exceptional our freedom is to create the life that we want.  As I thought about what my daughter might do with her life, in the back of my mind, I was reminded about the world of children who do not have it as good as her.charitable

In conversations with clients, I have found that this thought in the back of my mind is not unique. Charitable intentions are often personal and typically motivated by different life experiences. I have noticed that some people have certain ways in which they are methodical about giving, while others simply try to give when they can. Whether charitable giving is an important part of your wealth management and estate plan, an obligation of your religious or spiritual ideals, or that voice in the back of your mind that tells you there is more to do for humanity, creating a plan allows a more thoughtful, deliberate approach to your charitable giving.

Here are some steps to get started with your plan:

Write a Family Mission Statement for Giving. 

Think about who needs to be included in family decisions for giving, what causes your family wants to support and what values your family would like to promote.  Write down your mission statement so that your plan can be measured against what you are trying to accomplish.  It may follow this format:  “We will contribute to causes that benefit ________, so that our family can promote ________ in the areas of ___________________.

Define how and when you want to give.

You might ask yourself whether there were donations you felt coerced to make last year, or charities you wish you’d supported more. You could ask those organizations you care most about whether they prefer small, frequent donations or one large one at a particular time of year.

Do your research.

Study out the charities that you would like to be involved with.  Study their websites and read their annual reports.  As a donor, you have the right to ask questions and verify the legitimacy of the cause you are becoming involved in.

Remember to consult your financial and tax advisers on how to structure your gifts.  Here are a few financial items to consider:

  • You only receive a tax deduction if you are itemizing your deductions.
  • Substantiate the values of non-cash items through an appraisal or a stock valuation, and make sure you document these values.
  • If you donate appreciated assets like stock, it is helpful to donate directly to the charity.  This allows you to avoid the capital gains tax you would incur if you sold the asset and donated the value.

Planned giving can be an important part of an overall financial plan.  Creating a solid plan now may not only benefit the causes that are important to your family but using the right strategies may enhance your family’s well-being for future generations.  We are always happy to provide guidance.  Please click on the following link to learn more about structuring your family’s plan: