Giving Wisely: Ways to Make a Lasting Impact Through Financial Giving

When it comes to giving, many people want to leave a meaningful legacy, whether by supporting loved ones, uplifting their communities, or contributing to causes they care deeply about. Financial giving, when approached strategically, can maximize the impact of your generosity while aligning with your financial goals. Here are ways to give effectively and thoughtfully:

1. Charitable Donations: Supporting Causes Close to Your Heart

Charitable giving is one of the most direct ways to make a difference. Whether you’re passionate about education, environmental conservation, or health research, donations can drive positive change.

• Choose Reputable Organizations: Research charities to ensure they use donations effectively. Websites like Charity Navigator or GuideStar can help.
• Set Up Recurring Contributions: Automate donations to provide consistent support to your chosen causes.
• Leverage Tax Benefits: Contributions to qualified charities may be tax-deductible. Consult a financial advisor to structure your giving in a tax-efficient manner.
• Establish a Donor-Advised Fund (DAF): A DAF allows you to set aside money for charity, receive an immediate tax deduction, and distribute funds to nonprofits over time.

2. Gifting to Family and Loved Ones: Sharing Your Wealth

Financially supporting loved ones can provide opportunities and security for generations to come. Consider these options:

• Annual Gift Exclusion: In 2024, you can gift up to $17,000 per individual ($34,000 for married couples) without triggering gift taxes.
• 529 College Savings Plans: Contribute to a 529 plan to help children or grandchildren with future education expenses. Many plans offer state tax benefits.
• Trusts for Long-Term Giving: Establishing a trust can provide for your family while controlling how and when the assets are distributed.
• Covering Health or Education Expenses: Payments made directly to educational institutions or medical providers for someone’s benefit are not subject to gift tax limits.

3. Volunteer Your Investments: Donate Appreciated Assets

If you’ve seen significant growth in your investments, donating appreciated stocks or other assets can be a win-win:

• Avoid Capital Gains Tax: By giving appreciated securities directly to a charity, you avoid the capital gains tax you’d incur if you sold them.
• Get a Full Deduction: You can claim a deduction for the fair market value of the asset on the date of donation, subject to IRS limits.
• Give Through Your IRA: Individuals over 70½ can make a Qualified Charitable Distribution (QCD) directly from their IRA, satisfying Required Minimum Distributions (RMDs) without increasing taxable income.

4. Create a Legacy: Planned Giving

For those looking to leave an enduring impact, planned giving allows you to support causes or individuals long after you’re gone:

• Include Charities in Your Will: Name a charity as a beneficiary in your will or estate plan.
• Establish a Charitable Remainder Trust (CRT): Receive income during your lifetime while leaving the remainder to a charitable organization.
• Name Charities as Beneficiaries: Designate a charity as a beneficiary of your life insurance policy or retirement account.
• Create an Endowment: Endowments provide ongoing support to organizations or causes, ensuring your impact continues for years.

5. Incorporate Philanthropy into Your Business

If you’re a business owner, giving through your company can amplify your impact while enhancing your brand:

• Corporate Sponsorships: Support community events or initiatives through sponsorships.
• Employee Matching Programs: Encourage philanthropy by matching employees’ donations to approved charities.
• In-Kind Donations: Provide goods or services directly to organizations in need.
• Foundation Creation: Establish a corporate foundation to formalize your company’s philanthropic efforts.

Final Thoughts: Giving With Intention

Generosity is about more than just writing checks; it’s about creating meaningful, lasting change. By aligning your financial giving with your values, you can make a difference for your family, your community, and the world.

Before making major financial decisions, consult with a financial advisor or estate planning professional. They can help you explore options, maximize tax benefits, and ensure your giving aligns with your overall financial strategy.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Avenues to Wealth Financial Advisors and Cambridge are not affiliated.

*Content Prepared by Jonathan Neher