Planning your Charitable Gifts


Sometimes our desire to give leads us to make commitments that are difficult to fulfill. Any endeavor worth undertaking, especially one that can benefit others, deserves our careful consideration before we begin. Doing so can yield the greatest results.

web-plan-3036-101413-gs3036.jpgWhen contemplating making charitable contributions, consider the following:

Choose Your Causes. Good causes abound and regularly demand our attention. Choose a limited number of organizations that concentrate on areas that are important to you, and then research what kind of help they need.

Budget Your Gifts. When planning your annual budget, include charitable gifts. Spreading your donations over the year can both lessen the impact on your finances and increase the total you may be able to give.

Plan Your Volunteer Career. Volunteering can be a personally rewarding experience, especially when you can see the fruits of your labor. Carefully determine the time you have available to ensure your best efforts for your cause, and avoid overloading yourself.

Review Your Plans. Just as you review your annual financial budget, you should review your annual time/value budget. Revise your volunteer commitments to include those where the rewards have been the greatest for both you and your cause.

Consider Your Local Community.  For relatively small donations, such as $2,500 per year, consider payroll deductions with an organization similar to the United Way.  Larger contributions such as those under $100,000 might be best suited through community foundations.  Community foundations offer advantages in which donors do not have to manage their own funds or handle their own investments.  The community foundation does it for them.  For very large contributions, such as those over $100,000 it may be beneficial to set up a personalized fund for your donations.  Regardless of the size of the contribution, contact local charitable organizations for more information as well as a qualified tax professional and Certified Financial PlannerTM professional.

Consider a Lifetime Gift. If you are fortunate enough to be in a position to increase the amount you donate, or you are concerned about the future of the organizations you support, consider making a lifetime gift.  A lifetime gift is a promise of funds to be made from your estate upon your death.  However, using your estate as a conduit can lead to a reduction in your intended gift if any of the following are experienced:

  • A decrease in the fair-market value of your assets before your death, 
  • Unforeseen estate expenses that must be made from your assets, or
  • The elimination of your gift if your will is contested.
When making a significant charitable contribution, the treatment of your gift for federal tax purposes will vary depending on the type of asset donated, the type of charitable organization receiving your gift, and your individual circumstances and overall tax status.  If you intend to make a charitable contribution that you consider to be significant, the assistance of a qualified tax professional and a Certified Financial PlanningTM professional is recommended to help ensure that your planning decisions are consistent with your overall long term goals and objectives.