Make Charitable Giving More Meaningful

Every year billions of dollars are donated to non-profit organizations through charitable giving. In this article we will explore how individuals allocate their gifts and how to make donating or giving to charity more personal and meaningful. When one’s giving is consistent with their core values and beliefs, the relationship with the charity is strengthened and it increases the likelihood of ongoing gifts.

According to Giving USA in 2009 Americans donated more than $307.75 billion to their favorite non-profit organizations and charities. The majority, approximately 75% of charitable giving was attributed to individuals. Charitable foundations and other corporate giving amounted to 17% of total funds donated. Online giving accounted for 67% of all dollars donated in 2010. The online charitable giving channel is rapidly becoming the method of choice for how to donate.

Individuals make charitable giving decisions based upon a variety of factors. Among the leading recipients of money for charity are Human Services Organizations, Environmental and Animal Welfare Organizations, Arts and Cultural Organizations, and Disaster Relief Groups. The last category is one where recurring gifts are less frequent. Whether through online portals, mobile text campaigns, or direct charitable giving, these donations are an appeal in a time of need that elicit and immediate, although fleeting, emotional response. So then, how can individuals maximize their charitable giving to non-profit organizations and create a lasting relationship with the recipient? Will a values-based charitable giving create a stronger tangible benefit to the donor?

The preeminent philosopher Maimonides lists his famous Eight Levels of charity. According to the medieval scholar the highest level of giving is to form a partnership with a person in need enabling the recipient to overcome the necessity to rely upon others. Importantly, the concept of an ongoing partnership is raised. This is a deeply personal connection to the individual or organization in need and not a one time, sterile, or non-personal gift. A two way relationship is created whereby the charitable giving donor is simultaneously being uplifted because the action is not for selfish reasons, but a reflection and outward example of living according to ones values. In the context of Abraham Maslow, this exemplifies a life in harmony and a donor who is self-actualized.

When deciding upon which non-profit organization to donate to and determining how to donate realize that it is crucial to take responsibility for ones actions. Philanthropy is a perfect vehicle to experience and enhance ones true purpose. The highest return on charitable giving will be achieved by developing an ongoing and daily relationship with a charity that is consistent with your core values and beliefs.

One can achieve any dream or goal by insuring that their daily actions are consistent with their core beliefs. The individual is assured of success because positive life changes are in harmony with their value system and motivated by their desire to aid their favorite charity or non-profit through a charitable giving program. As the individual encounters daily success they begin to realize that they are in control of their life, able to make proactive and positive decisions, and gain self-confidence.

As the individuals are presented with appeals for charitable giving they think carefully about how they can and will make a difference in the lives of others, and by doing so, how they too will benefit and be truly inspired.

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Charitable Giving and Your Personal Finances

Philanthropy is Full-Anthropy

Has anyone ever asked you what you would do if you had all of the money in the world? Most commonly, people respond with, “I’d buy a bigger house or travel.” This is often followed by, “I’d donate more money to charity.”

People who are charitably inclined usually are living a rich, full life. We all have some affinity to a specific charity we like to support. As a Financial Life Planner, I have come to learn that charitable giving is an important goal for most people. Yet most of us don’t have a process for funding this goal.

A simple way to meet your charitable goals is to contribute to a Donor Advised Fund (DAF). A DAF is like a holding account created by a sponsoring charity that holds contributions from various donors and manages the charitable donations. The DAF will send you a quarterly statement of your contributions, along with a gift receipt for tax purposes. These contributions can then be distributed to qualifying charities at some point in the future.

You can usually deduct the full value of the charitable gift – whether it is appreciated stock (avoiding capital gain), or cash. The deduction is subject to adjusted gross income limitations. The gift is irrevocable and is also separate from your estate. Any income or growth in the fund is not tax deductible BUT is exempt from taxes. Once the gift is made, you can recommend how the donation is invested, through asset allocation strategies. You can name successors to the account, who then can manage the fund and make grant recommendations. This provides for a legacy of giving that can last for many generations.

You can get your kids or spouses involved and create your own account title. I know families who have semi-annual meetings with their kids and grandkids to discuss where the grants should go. What a great way to introduce philanthropy to kids!

The DAF accounts can be set up with as little as $5,000. You can support multiple charities with a single donation, usually with as little as $100. When you are ready to recommend to the DAF to make a gift to a specific charity, you just fill out a form and mail it to the DAF. The donation from the DAF can be anonymous, or can have your name identified as the donor.

What part do philanthropy and charitable giving play in your value system? Think about causes and organizations you would like to help. Most people that give to charity are happier and healthier. They experience a sense of satisfaction of helping people or specific causes.

John Templeton wrote: “Happiness comes from spiritual wealth, not material wealth… Happiness comes from giving, not getting. If we try hard to bring happiness to others, we can not stop it from coming to us also. To get joy, we must give it, and to keep joy, we must scatter it.”

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