Skip to Content

Getting the Most From Giving
December 2019

Dec 30, 2019 | Business Owners | Cash Flow | Families | Featured | Today's Professionals

Too often, it can feel like there are so many worthy causes in the world that we don’t know where to start.  A good jumping off point is to focus on causes that align with your values, and ideally are managed by people whom you trust.  Being proactive about selecting the causes you choose to support can make it easier filter out the many requests for financial assistance that we receive throughout the year.

Intentional Generosity

Think of generosity as a practice, something we cultivate more strength in with experience. When it comes to giving money or time, two things most people feel scarcity around, it can be challenging to find balance. What happens when you give something you don’t really have to give, such as saying yes to donating time when you already feel overextended? Guilt and fear become entangled in the process and you don’t get to truly experience the generous act.

To counteract this, decide to experiment with generous giving, free from guilt or fear. Reflect on the ways you’re already being generous in your life. Then compare the times you’ve given with an open heart with the times you’ve given from scarcity or a sense of obligation. Seeing the stark contrast between these situations can aid you letting go of old patterns and allow you to focus on giving from the abundance in your life.

Donor Advised Funds (DAF), A Great Tool For Giving!

DAFs are like your own personal foundation without the hassle and expense. The minimum to open a DAF is usually $5,000 and you can fund it with either cash or assets (appreciated assets can be an ideal funding source). You can even pre-fund several years of giving in advance to maximize tax advantages.

Using a DAF accomplishes several things at once:

  • It prompts you to think in advance about giving. Having an internal conversation earlier in the year will make you feel proactive. You can give throughout the year rather than doing it all at the late December deadline.
  • It can provide you with an easy response to requests for contributions.  “I do all of my charitable giving from my DAF”.
  • It allows you to use appreciated securities to fund the account. Rather than paying capital gains taxes on your investments to create the cash to fund it, you simply transfer the appreciated securities into the DAF.  For example, a mutual fund you bought for $1,000 is now worth $10,000. If you donate the stock to the DAF instead of selling it, you don’t have to pay capital gains tax on the $9,000 of growth.

Giving through a DAF should involve coordination with your tax preparer and financial advisor.  This coordination can help ensure optimization of your giving strategy.

Giving In Non-Financial Ways

Giving doesn’t always mean financial, especially if you consider the “3-Ts” approach:

  1. Time – For some people time is a more readily available resource than money.  This can also be a more fulfilling way to support causes we feel passionate about.
  2. Talent – You know what you’re good at, so find a way to share that talent with your favorite charities.  This can add a lot of leverage and value to the time you are giving.
  3. Treasure – Treasure doesn’t always mean money. Think of treasure in terms of what your favorite charity needs most. Do you have possessions you no longer use that could be of value to organizations you support?

Studies show happiness comes from giving to others.  Effectively planning how you’re giving can exponentially increase benefits to all involved!

 

IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Pathway Financial Advisors, LLC-“Pathway”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Pathway.  Please remember that if you are a Pathway client, it remains your responsibility to advise Pathway, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Pathway is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Pathway’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: Pathway does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Pathway’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.