Creating good by giving back is a gift to yourself, local financial advisers say. But before making a major donation to support your favorite cause, heed the following pieces of advice to avoid scams, maximize that gift and leave a lasting legacy of philanthropy.
Debra Light, Moneta Group
• CHOOSE WISELY. Charitable giving creates amazing and exponential benefits. By sharing your time, talent and wealth, you have an opportunity to instill in your children a broader view of the world and a sense of moral responsibility, selflessness and empathy. Select a charity whose mission resonates with you and your family, and research the percentage of your gift that actually reaches the intended recipients via the Better Business Bureau, Wise Giving Alliance or charitynavigator.org.
• COMPARE METHODS. There are many ways to make a charitable gift: a direct donation, a donor-advised fund, a private foundation gift or the establishment of a charitable trust. Deciding which is right for you is an important decision you can tailor to your individual goals, tax situation and resources. A qualified financial adviser can help you identify which method is best for you as part of your overall financial plan.
• CONSIDER GOALS. Think about your charitable goals and the scope of your plan. By identifying these, you can determine whether you intend for your gift to extend beyond your lifetime. If you want your children to partner with you now and carry on your charitable legacy, make those wishes clear.
• GROUP EFFORT. Understand the rules and involve others. Creating a personal giving council, either informally or formally, is an option you may use to involve others. Select professional advisers—tax, financial and legal—who can understand your charitable pursuits, assure you are in compliance with current rules and regulations, maximize your opportunities and efficiencies, and achieve your philanthropic goals.
• SHARED VISION. Define your purpose and share the message. Include your family in your philanthropic vision—consider a holiday event or a family retreat to have rich multi-generational conversations about the charitable legacy you want your family to leave behind.
Maurice Quiroga, PNC Bank
• TRUSTWORTHY TEAM. Partner with your trust company, financial advisers and estate planning attorneys to confirm the charity’s legitimacy and ensure you receive the proper tax refund.
• AVOIDING SCAMS. Beware of organizations that claim to have religious or charitable ties trying to take advantage of generosity, particularly with seniors. Before donating, use guidestar.org to give yourself an overview of the organization’s mission, board members and financials.
• RESEARCH RESOURCES. Ensure the nonprofit has the board and resources to handle the type of donation you would like to offer. An outright gift that is one or more times the charity’s budget can create tension among the board because of potential disagreements on how the funds should be used. One solution to this issue is creating a charitable trust that gives annual dollars to the nonprofit, preserving their work for years to come.
• STRAIGHT TALK. Donors should talk to the charity about their goals and ultimate wishes to ensure it will align with the family’s legacy.
• MAKING A DIFFERENCE. Philanthropy can leave a lasting legacy for not only the charity, but your family. There are so many giving multi-generational families that have made St. Louis a better place. It becomes a win-win for the community and the family.
Scott Meyer, BMO Private Bank
• REFLECT PASSIONS. Identify charities that reflect the important influences in your life, such as schools attended, community ties or health concerns that impact family and friends.
• CONSIDER ALTERNATIVES. Give careful consideration to donating appreciated property rather than cash. There are significant benefits to donating appreciated property, and charities are typically receptive to a wide range of donations.
• LEAVE A LEGACY. Consider gifting that involves your family in philanthropy. This may include a program of lifetime giving or setting aside money to carry on a charitable legacy.
• CHOOSE THE RIGHT TIME. The tools used for your gifts and timing of your donations should depend upon your interests and priorities, current need for funds, your values and any tax concerns.
• DO YOUR HOMEWORK. For a guide to giving, refer to Giving With Confidence: A Guide to Savvy Philanthropy by Colburn Wilbur and Fred Setterberg.