By Suzanne Hazlett, MBA, CIMA®, CFP®
According to the Chronicle of Philanthropy, charitable giving declined 6 percent during the first quarter this year. In their 1977 hit song Give A Little Bit, British rock band Supertramp sang their famous lyrics, “Now’s the time that we need to share.”
While the U.S. economy has a long road toward recovery, many investors have benefited from the rallying stock market. Some donors may want to consider giving away a growing asset, for example, common stocks. In considering giving strategies that may increase your donation’s tax benefits, talk to a tax, legal or financial advisor to explore your alternatives. Here are a few considerations.
GIFTS OF APPRECIATED SECURITIES: Many donors fund charitable contributions with long-held, appreciated securities rather than cash. For some contributors, doing so may yield a more significant tax benefit. You may be able to deduct the securities’ full value while avoiding capital gains taxes on the increased value.
DONOR ADVISED FUNDS: A donor advised fund (DAF) is a charitable giving account that is relatively inexpensive to establish and maintain. A DAF allows you to immediately contribute and reap allowable tax deductions.
CHARITABLE REMAINDER TRUSTS: With a charitable remainder trust (CRT), you donate assets to the trust and receive an immediate tax deduction. During your lifetime, you receive an income stream. Upon your death, your designated charitable organization will receive the remainder of the assets.
PRIVATE FOUNDATION: Establishing a private foundation provides similar benefits as a donor advised fund, although at a higher cost and with more complex administrative responsibility. In establishing a foundation, you are creating an institution. It is not for the casual charitable giver. The upside is you will have greater control in achieving your giving goals.
Each donor’s situation is unique. While this shortlist is just an introduction, gaining familiarity with these terms may help initiate discussions with your family, advisors, and with charitable organizations you have an interest in supporting.
Suzanne Hazlett, MBA, CIMA®, CFP®, is a Certified Investment Management Analyst® and CERTIFIED FINANCIAL PLANNERTM professional. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Raymond James and its advisors do not provide tax or legal advice. Donors are urged to consult the appropriate professions regarding the tax-deductibility of contributions. Charitable giving strategies may incur fees, charges, and costs. HAZLETT WEALTH MANAGEMENT, LLC is independent of Raymond James and is not a registered broker/dealer. 675 Sun Valley Road Ketchum, Idaho, 208.726.0605. HazlettWealthManagement.com
