Here are five tips to maximize your giving, just in time for the holidays.
1. Find matching opportunities.
Many charities have annual fundraising campaigns with mega-donors who match contributions — sometimes as much as 3:1 — received during specified timeframes. Check to see if your favorite causes have similar opportunities that could double or even triple your impact, and help the organizations reach their goals.
Employers often offer matching programs, too, which can make a big difference to nonprofits. You can even start a program in which you supply the funds for a future matching challenge.
2. Make it a family affair.
The holidays offer a rare opportunity to get the whole family together, and it’s the perfect time to get your kids and grandkids involved in giving. One idea is to create a “giving budget” to donate to charity. Each child then suggests a cause to help everyone decide where and how to distribute the “budget.” Actual dollars can then be given for the holidays — and even matched by grown-ups. The possibilities are limitless.
3. Formalize your giving.
If you don’t have a charitable vehicle but have been giving consistently and expect to give more in the future, several options are available to ensure your gifts are more organized, strategic, and tax-efficient. You can diversify and expand your giving with vehicles like a private foundation or a donor-advised fund that will earmark assets for charitable purposes and potentially provide meaningful tax benefits.
Private foundations offer flexibility, control, and other unique advantages that support creative and entrepreneurial philanthropy. Donor-advised funds provide advantages like anonymity and higher tax deductions. You can also incorporate your philanthropic objectives into your will or estate plan and explore planned giving and trusts.
4. Don’t forget Uncle Sam.
Coordinating your charitable contributions with your tax strategy, estate planning, and investment management could result in better outcomes — across all disciplines — and ensure that you get beneficial tax deductions, which in turn allows you to give more. With charitable vehicles like private foundations and donor-advised funds, you can maximize your tax savings and may be able to claim a same-year tax deduction.
5. Know your minimums.
If you have a charitable vehicle with a minimum distribution requirement, make sure you know what it is and how much you have left to disburse so your assets are used for charitable purposes and not penalties. For example, private foundations are required to annually distribute at least 5% of the previous year’s average net assets.
Qualifying distributions from the foundation include grants to public charities, administrative expenses, and certain costs related to carrying out the foundation’s charitable purpose, such as a building, computers, and office furniture.
We hope you find these tips useful and are able to use them to feel even better about giving during this holiday season.
Source: Kiplinger
Content in this material is for general information only is not intended to be a substitute for individualized financial advice. Please consult your legal advisor regarding your specific situation.