Charitable Planning
Tax-efficient giving strategies to make an impact and leave a legacy.
Designing a Charitable Giving Strategy Aligned With Your Family Values
There are many worthwhile charities to choose from. As you're narrowing down your options, consider what life experiences have impacted you and what your family's values are. If you'd like to be more intentional with your giving, it may make sense to establish a charitable giving strategy. Not only can planned giving enhance the tax efficiency of your gifts but it can also help you have a greater positive impact on the charities you wish to support. Let's discuss how we can craft your family's charitable giving strategy.
Charitable Giving Strategies to Consider
Donor-Advised Fund
Qualified Charitable Donation
Private Family Foundation
Charitable Remainder Trust
Bunching Donations
Tax-Efficient Giving
There are many ways to donate to charities and set up your giving strategy, and each has different characteristics and tax implications. At Creative Planning we work with you to maximize your charitable impact while minimizing your tax liability. For example, instead of donating cash to a charitable organization, it may be more impactful and tax-efficient to make an in-kind donation of appreciated securities, such as stocks, bonds or mutual funds.
Donor-Advised Fund
A donor-advised fund (DAF) is a 501(c)(3) charitable fund that holds irrevocable charitable gifts. As the donor, you retain control over the timing of distributions as well as the organizations to which donations are made. A DAF allows you to make a single large contribution of cash, securities or other assets during a year in which your income is higher than normal, then distribute the assets to charities over several years. Doing so can be an especially effective way to lower your taxable income during years in which you experience a large taxable event. Also, assets inside the DAF can be invested and grow tax-exempt within the account.
Choosing the Right Organizations for You
As you’re researching charities, it’s important to gain an understanding of the following:
- Mission – What's the purpose/mission of the organization? Is it in line with your charitable giving objectives?
- Actions – What specific actions does the organization take in pursuit of its mission?
- Impact – How does the organization measure its impact? Can it provide evidence that its past actions have resulted in progress toward achieving its mission?
- Finances – Is the organization financially stable?
- Leadership – Is the charity led by strong, capable and dependable leaders?
- Key contributors – Who are the major donors to the organization? Do those donors share your values?
To help answer these questions, consider researching potential organizations on websites such as Charity Navigator and GuideStar.
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Creative Planning has advisors in just about every major metropolitan area. We look forward to getting to know you.
