BY KRISTIN HOVENCAMP
In their 1986 hit song Give a Little Love, Ziggy Marley & The Melody Makers sang the lyrics, “We got to give a little love, have a little hope, make this world a little better.”
The U.S. economy has a long road toward normalization, and donors are adapting their giving strategies to fit today’s climate. For instance, investors benefiting from the recent stock market rally are gifting a growing asset such as common stocks. Talk to a tax, legal or financial advisor to explore your alternatives in considering giving strategies that may increase your donation’s tax benefits. 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’ total 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. Your designated charitable organization will receive the remainder of the assets upon your death.
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, familiarity with these terms may help initiate discussions with your family, advisors, and charitable organizations you are interested in supporting. “Let’s do what we can do together.”
Kristin Hovencamp is an Investment Executive and Director of Business Development with HAZLETT WEALTH MANAGEMENT, LLC, which is independent of Raymond James and is not a registered broker/dealer. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. 675 Sun Valley Road, Suite J1 + J2 Ketchum, Idaho 83340 208.726.0605.