Charitable Giving is a Good Investment 

The holidays are upon us, and although it is unseasonably warm, Thanksgiving is soon, and December is right around the corner. As an American you might be feeling the pressure to give, but are hopefully just in a festive, giving mood. That’s because in 2018 Amerians donated $427 billion, according to the National Philanthropic Trust.  

Even though the financial contributions are made for the greater good, savvy investors, and your fiduciary advisor in Orlando understand that a charitable contribution can and should also be viewed as an investment. 

Why Should You Donate 

There are a myriad of reasons to donate and those reasons are as different as the people making the contributions themselves. Aside from furthering the agenda of a cause close to the heart, charitable donations can help the soul, balance karma, and lighten someone’s personal brand. Giving to a nonprofit is also a wonderful way to pay tribute or celebrate the legacy of a loved one; it can also create a tax advantage for investors.  

Charitable giving over the course of one’s life can help with estate planning, and charitable tax write-offs generate guaranteed returns. There are several ways that a charitable contribution can be viewed as an investment. For example, by opening a Charitable Remainder Trust, assets and properties that aren’t generating income could be turned into profitable holdings. Charitable donations can also help to fund life insurance and foundations often offer reduced income or estate taxes. Additionally, there are avenues that can help to reduce gift taxes or allow assets to grow tax free. 

How Should You Donate 

Sadly, as it is the season for giving, it is also the season for scamming. So you’ll need to work with a “buyer beware” attitude and fully vet your causes. It is taking an extra step, but you want to make sure your money is safe, being used properly, and the most efficiently. On the upside, there are plenty of options to help you screen charities and feel comfortable and confident in giving! Sites like Charitynavigator.or g, which objectively ranks charities and GuideSta r, which collects tons of data on different charities, from tax returns to mission statements, will both be able to provide detailed information so you know where and how your money would be used. 

When Should You Donate 

From a tax savings perspective, there is not necessarily a better or worse time to give. As the holidays arrive, there is usually a stronger urge to give, and with the year ending shortly, now is often a preferred time for investors trying to limit any sort of tax burden.  

Regardless of how much you donate, or to whom, it is important that you have a charitable giving plan, just as you have an overarching financial plan. Look into charities that support causes closest to your heart, and  work with your financial planne r to develop a plan centered around your giving that will help maximize the benefit of your donation, for both you and your preferred charities.  

  

 

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