The Smarter Giving Guy » giving

Nine easy ways to give to your favorite charities

SG Guy — Sun, 22 Nov 2009 16:48:18 +0000

Here’s what you’ve been waiting for. A list of nine ways to give to your favorite charities, and they range from easiest to easy. If it’s difficult, challenging, complex or even sweat-inducing, it doesn’t make the list.

In addition to being easy, donating to charity can be tax-smart – reducing your income, capital gains, and estate and gift tax liabilities.

Download / print out the PDF.

The List:

Category	Ease	Approach	Cost to Create	Revoc-able?[1]
Lifetime Giving	Easiest	Write a check to a charity	Minimal	No
	Easy	Create and donate to a Donor-Advised Fund[2]
	Easy	Transfer an appreciated asset (stock, mutual fund, real estate, etc.)[3] to a charity
	Easy	Contribute tax-free to a charity in 2009 directly from your IRA[4]
Estate Giving[5]	Easiest	Name a charity as beneficiary of an IRA or other retirement plan, life insurance or annuity[6]	Minimal	Yes
	Easiest	Name a charity as “pay-on-death” beneficiary of a bank account[6]
	Easy	Name a charity as “transfer-on-death” beneficiary of a brokerage or mutual fund account[6]
	Easy	Add a charity in a bequest under your will	Moderate
	Easy	Add a charity as a beneficiary under your revocable living trust[6]	Moderate

[1] Each of the listed estate giving approaches is revocable. That means you can change your mind during your lifetime by changing the underlying paperwork.

[2] A donor-advised fund is an investment account administered by a charity or investment organization. A donor opens a donor-advised fund by making a contribution, and receives an immediate income tax deduction. The donor no longer controls the funds contributed, but can recommend grants to charities of their choice.

[3] By donating an appreciated asset, you avoid any capital gains taxes you would pay when you sell it during your lifetime – a tax-smart alternative to selling the asset and donating cash.

[4] Normally, IRA withdrawals are taxable income. Until December 31, 2009, however, you can withdraw and donate tax-free from your IRA, if you are at least age 70 ½. The check should be paid directly from the IRA account to the charity.

[5] Even though it’s called “estate giving” (because the gift happens when you die), you have to act during your lifetime to use these approaches.

[6] This approach also avoids probate. Probate does not apply to lifetime giving.

The Philanthropist – One in Millions!

SG Guy — Sun, 21 Jun 2009 16:45:37 +0000

This Wednesday evening brings the NBC premiere for The Philanthropist – the story line: “For billionaire playboy Teddy Rist, the world is his playground, until a trip to Nigeria forever changes him.”

Teddy joins a wonderfully non-exclusive club here in the States – philanthropists. More than 90 million U.S. households donate to charities, while more than 60 million people in the U.S. volunteer at nonprofits — philanthropists abound. I’m guessing that few are billionaires, few are playboys and few call themselves philanthropists, but Teddy Rist is joining good company.

I’m going to watch — hoping that Teddy displays both the heart and head needed to be an effective philanthropist.

Families Giving Together

SG Guy — Mon, 15 Jun 2009 20:52:59 +0000

Consider discussing your giving goals and amounts within your family, and even share research and decision-making.

This can be an excellent way to educate young children about philanthropy, and about being a focused and smart giver. It can also be a good way to share information with adult children about your estate and charitable planning.

You could allocate charity research among family members. You could also allocate decision-making — as examples, setting set aside a dollar amount or a percentage of the total

for each child (young or adult)?
for each grandchild?
for joint decisions?

The family that perseveres in good works will surely have an abundance of blessings. — Chinese Proverb

Do Good and Avoid Capital Gains Taxes

SG Guy — Sat, 04 Apr 2009 02:01:15 +0000

Facts: Several years ago, you bought 10 shares of Surprise Corp. at $10. Today, each is worth $100 – your $100 investment has become $1,000. Today, you want to make a $1,000 donation to your favorite Qualified Organization charity. Two different approaches (shown below as Plan A and Plan B) produce very different results. We suggest you go with Plan B!

Plan A: If you sell the 10 shares and give the net proceeds to charity,

You receive $1,000 (before commissions).
You have a $900 taxable capital gain.
You pay $180 in taxes (using an estimated combined Federal and state tax rate of 20%).
You net $820.
You add $180 and make your $1,000 donation.
You do good and receive a $1,000 charitable deduction — at a cost to you of $1,180 plus commissions.

Plan B: If you give the shares directly to the charity,

You do good and receive a $1,000 charitable deduction — at a cost to you of $1,000.
Note: When the charity sells the shares, it pays no taxes on the capital gain.

Double Your Donation with an Employer Match

SG Guy — Sun, 22 Mar 2009 00:22:39 +0000

Many employers maintain match gift programs — in effect doubling (or even tripling) charitable donations made by their employees. Some programs also include former employees.

To find matching employers:

Go to your employer’s (or past employer’s) website and enter “Matching Gifts” in the search box.
Call your employer’s (or past employer’s) human resources department or representative.
Chadwick School, Palos Verdes Peninsula, CA maintains a free database and look-up tool.