July 2007

Rediscover the Tax Benefits of Charitable Giving

Now is a good time to help your clients start planning for their 2007 tax return, while taking into consideration the lessons learned from the 2006 tax preparation.

One often overlooked strategy is to think differently about charitable giving. According to a recent Yankelovich Partners study, more than 90% of affluent Americans donate to charity every year¹ but the large majority of donations are made in cash, which may not be the most tax-advantaged way to give.

The Fidelity Charitable Planning Calculator is a new resource that you and your clients can use to help assess the advantages of donating non-cash assets. This online calculator can help evaluate the potential benefits of using a structured charitable giving solution. By taking five minutes to complete the calculator questions, you and your clients can better understand:

• how a structured giving solution could ultimately provide greater benefits to them and their favorite charities;
• the tax benefits of donating appreciated securities to charity;
• the amount of time their charitable contributions could support a given stream of grants to charity; and
• how much more financial support they could provide to charities by taking advantage of planned giving.

When you help your clients approach their giving in a thoughtful, organized way, it may result in an even greater impact on the charities they support.

New rules make cash donations tougher to manage

Beginning this year, the IRS requires taxpayers to have a bank record or written communication from the charity showing the name of the charity, date, and amount of the contribution for every cash charitable contribution, regardless of its size. It will no longer be sufficient to back up cash donations with personal bank registers, diaries, or notes made around the time of the donation. This is another reason your clients may want to consider options such as a donor-advised fund to better organize charitable giving.

How Fidelity can help

• Visit the Fidelity Charitable Planning Calculator
• Learn about and compare charitable giving solutions.
• See how contributing long-term appreciated securities can be better for both your client and the charities they support.