Between COVID-19, the devastating fire season, and all the other upheavals 2020 has brought us here in Southern Oregon, it is easy to get discouraged. However, I am always encouraged by the way this community comes together in times of need. There are many heartwarming stories of how local individuals, businesses and groups have been reaching out to help others when they have needed it the most. As someone who grew up here in Southern Oregon, I know that giving back is in our lifeblood.
As we enter the holiday season, I'd like to share with you how you can make a lasting impact through charitable giving as part of your estate planning. First, let's address the question that may have already popped up in your mind -- "What about my family?" Of course, you want to provide for your family members, but you may be able to support them and also include a bequest to a favorite charitable organization. I encourage my clients to bring their adult children into this conversation. Perhaps you can choose a non-profit that the whole family supports and begin a cycle of multi-generational giving. It's also important for your family members to understand the tax benefits of charitable donations since non-profit organizations are tax-exempt.
Consider the following four strategies for charitable giving:
- Foundations or donor-advised funds. We've all read the stories about someone like the unassuming secretary who left $8 million to the small local college that she never even attended. These gifts make headlines, but giving doesn't have to wait until after your death. If you would like to be active in philanthropy, you might want to consider setting up a private foundation. You can use grants from the foundation to help organizations, scholarship programs, and charitable activities. A donor-advised fund works like a charitable investment account to support an organization you care about. In addition to the support they offer charities, both of these options are useful for deferring capital gains from the sale of a business or large property.
- Charitable gift annuities and charitable remainder trusts. These forms of giving allow you to set aside money for the future use by a charity, but you're also able to take an income stream for yourself and your beneficiaries. I often suggest this option to a client when we are trying to defer some income tax on a large inheritance or a sale of a property.
- Retirement accounts. Did you know that your retirement assets (a traditional IRA or 401k) can be among the highest taxed part of your estate? You can decrease this tax burden on your family by donating these assets directly to a charitable organization.
- Your time. Giving brings joy and purpose to your life. I was fortunate in that I grew up with the concept of giving back to the world around you because you've been blessed so much. My mother was diligent with her tithing to the church and her giving to organizations. If my dad got a letter from a charity, he would always write a five-dollar check. But there are many ways to give back that don't involve money.
You could volunteer as a tutor with the library or as a dog walker for the animal shelter. You could donate your time to a food pantry or usher at the community theater. What are you passionate about? Is it the environment? The arts? Education? The homeless? Find an organization that speaks to your heart and then think of how you can support it in your own way. I truly believe you can lead a brighter and better life by giving back some of your wealth and time to your community.
If you would like to know more about how you can make a difference with your charitable giving, I would love to talk with you. Call my office at (541) 772-1116 or visit our website to schedule a meeting. While you are there, check out my Life by Design Podcast. Episode 7 is where I discuss planning for a lifetime of charitable giving.