December is right around the corner. That means your inbox and your mailbox will soon be filled with requests from nonprofit organizations.
Poverty, civil rights, women’s empowerment, animal welfare, medical research, disadvantaged children … ack! They’re all good causes. There are so many great organizations and different ways to give. How can you narrow down the options and feel good about your end-of-year giving?
Overall tip. Set aside some time, either alone or with family, to plan your giving. It’s important, just like all the other things that you set aside some time to do.
Reflect. Make a list of where you’ve given before. If you don’t have a list of contributions from past years, just jot down whatever you can remember. Then, using keywords, write down why you’ve given to those organizations. This helps you focus on your motivations for giving.
Distill. Take the reasons you’ve given and boil them down into values (tradition, justice, community, continuity, caring, etc.), causes (social services, Jewish education, the environment) or other broad categories. Feel free to add areas that are important to you.
Prioritize. Decide which areas are most important, maybe even deciding to not give in other areas.
Plan. Think about how much you can give away in total, or how much you should give away for tax reasons. An accountant or tax planner can be helpful.
Allocate. Decide how much goes in each area. List the organizations you cherish the most in each area; then assign amounts. Be delighted that you can make bigger, more meaningful gifts, and feel good about what you’ve done.
Now here are some things you can do for extra credit:
Involve your family. Write a family mission statement based on your history and values. Talk about how you want to make an impact on the world. It doesn’t have to be perfect, but it should speak to who you are as a family and how you would like to make a difference in the world. If you have a total amount in mind, think about whether you want to give only as a family, or if you want to designate amounts for family members to give individually. Find ways to allow each member to bring their own passions to the table while building communication and collaboration across the family unit.
Start a charitable fund for your giving. A donor-advised fund is a tax-smart charitable giving account you can set up with your local Jewish Federation or Foundation, or with any community foundation. With a donor advised fund, you are eligible for a same-year tax deduction on whatever you contribute to the fund now, but support charities of your choice in the current year or future years. This is especially powerful for those experiencing a high-income year or windfall, or someone in their prime earning years. When you contribute appreciated stock or other appreciated non-cash assets, like real estate, there are typically no capital gains taxes, and it can turn into both a tax deduction and dollars for giving. A donor advised fund also can get all your giving organized in a single place. Make sure to consult with your financial professional about this option.
Think about other ways to give. You can give stock, a life-insurance policy you no longer need or even real estate. If you are over 70½, you can give from your IRA and have it count against your required minimum distribution. Thinking longer term? Consider including legacy gifts to your most cherished charities in your will or trust, or as beneficiaries of your retirement account or life-insurance policy. Don’t assume you have to be rich to be strategic; a little time investigating your options can help you make a bigger difference. Again, we recommend consulting with a financial professional before making decisions.
Ask for help. Your local Jewish Federation or Jewish community foundation will be happy to support you with as much giving advice, assistance and guidance as needed. Please be in touch with questions.