Why Do You Give?

Whether you are just beginning to give or are a long-time supporter of charitable causes, it can be helpful to step back and understand why you give and where philanthropy fits into both your personal goals and financial plans.

Personal Reasons for Giving

By focusing on your priorities, you will discover which of your personal goals might be furthered through giving.

Frequent responses to the question "Why do you give?" are:

  • "I want to make a difference."
  • "Giving is a way to pass on family traditions and values."
  • "Being active in my community is important to me."
  • "Giving is a vital aspect of my spiritual commitment."
  • "Philanthropy is my family's legacy."
  • "We want to support organizations that have benefited us."
  • "Giving is a civic responsibility."

Financial Reasons for Giving

Giving is personally rewarding and has tangible financial benefits. Sophisticated giving strategies allow you to reduce current income taxes, achieve greater control over the final transfer of your wealth by minimizing potential estate taxes, and respond to life events that affect your financial situation.

Reduce Current Taxes

Making a gift can reduce your annual taxes. For example:

  • During high-income years, giving can help reduce federal and state income taxes through charitable deductions.
  • Giving appreciated assets to a nonprofit organization can produce a significant charitable deduction while also eliminating the capital gains tax due if you sold the assets.

Control the Transfer of Your Wealth

Most Americans would prefer to have their accumulated wealth go to heirs and nonprofit organizations rather than to taxes. Reducing or eliminating estate taxes is a priority for many people. This is not surprising, given that estate taxes can claim as much as 50 percent of your total estate. A professional advisor can help you implement giving strategies that will minimize potential estate taxes and channel your assets to the people and causes you care about most.

Respond to a Life Event

Many life events can spur a re-examination of your total financial plan, including your giving strategy. Such events may include:

  • Receiving a large inheritance
  • Selling your business at a profit
  • Entering retirement
  • Participating in a successful merger or acquisition
  • Having children or grandchildren
  • Changing marital status

Whatever your charitable goals are, putting a plan in place can help you make the most of your giving.

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