Charitable giving is when someone gives to an organization whose mission is to improve the world around them. This could encompass supporting people with necessities of daily living like food and shelter, environmental conservation, educational advancement, or humanitarian relief, just to name a few. To qualify as a charitable gift, the receiving organization must be registered in the United States as a charity, generally as a “501(c)(3).”
Why is charitable giving important?
As a wealth management firm, we will focus on the financial value in charitable giving. When aligning people’s money with their values, many find it important to use their abundance to give back and advance the wellbeing of a cause important to them. This could range from a $20 check to a multi-million-dollar endowment; they all make an impact.
In addition to supporting large, well-known organizations, charitable giving can help further a lesser-known cause with deep personal meaning. For example, having a family member diagnosed with a rare genetic condition might spur financial giving. This can have the additional effect of raising awareness, particularly if it is mentioned in social circles. Through financing and awareness, the donor can seek to improve the lives of others because of their resources.
How can charitable giving help you?
Although the biggest purpose behind charitable giving is to help others, there are benefits to the donor. Part of this benefit is the intangible goodwill received through the process of donating and seeing the improvement and impact of your resources. More tangibly, there are charitable giving strategies that may help lower your tax bill, ranging from simple to extremely complex. These charitable giving tax deductions vary based on the type of assets you have available to give (for example cash, stocks, etc.), your income level, the amount you’re giving, and other case specific facts.
Conclusion
If you are interested in charitable giving, the first step is identifying a few areas you are passionate about supporting. From there, the Foster & Motley team can help direct you to resources to identify specific charities that might be a good fit. Additionally, we can identify the most effective way maximize your tax savings through a charitable giving tax deduction so your dollars can stretch further. Contact one of our advisors today to learn more.