Estate Read Time: 3 min

Trends in Charitable Giving

According to the most recent report by Giving USA, Americans gave a record breaking $471 billion to charity in 2020.1

Americans usually give to charity for two main reasons: to support a cause or organization they care about, or to leave a legacy through their support.

When giving to charitable organizations, some people elect to support through cash donations. Others, however, understand that supporting an organization may generate tax benefits. They may opt to follow techniques that can maximize both the gift and the potential tax benefit. Here’s a quick review of a few charitable choices:

Direct gifts are just that: contributions made directly to charitable organizations. Direct gifts may be deductible from income taxes, depending on your individual situation.

Charitable gift annuities are not related to annuities offered by insurance companies. Under this arrangement, the donor gives money, securities, or real estate, and in return, the charitable organization agrees to pay the donor a fixed income. Upon the death of the donor, the assets pass to the charitable organization. Charitable gift annuities enable donors to receive consistent income and potentially manage their taxes.

Pooled-income funds pool contributions from various donors into a fund, which is invested by the charitable organization. Income from the fund is distributed to the donors, according to their share of the fund. Pooled-income funds can enable donors to receive income, manage their tax burden, and make a future gift to charity.

Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the pooled-income fund can be obtained from your financial professional. Read it carefully before you invest or send money.

Gifts in trust enable donors to contribute to a charity and leave assets to beneficiaries. Generally, these irrevocable trusts take one of two forms. With a charitable remainder trust, the donor or chosen beneficiaries can receive lifetime income from the assets in the trust, which is then passed to the charity when the donor dies; in the case of a charitable lead trust, the charity receives the income from the assets in the trust, which passes to the donor’s beneficiaries when the donor dies.

Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with these rules and regulations.

Donor-advised funds are funds administered by a charity that a donor can make irrevocable contributions to. This gift may have tax considerations, which is another benefit. The donor also can recommend that the fund make distributions to qualified charitable organizations.

Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the donor-advised fund can be obtained from your financial professional. Read it carefully before you invest or send money.

Some people are comfortable with their current gifting strategies. Others may want a more advanced strategy, however, which can maximize their gift and generate potential tax benefits. A financial professional can help you assess which approach may work best for you.

Remember, the information in this article is not intended as tax or legal advice. And it may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.

1. WashingtonPost.com, June 15, 2021

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

The Big Picture–Little Focus on Big Issues

The Big Picture–Little Focus on Big Issues

If the stock market is hitting record highs, why aren’t money managers feeling the love?

Business Owner’s Guide to the New Normal

Business Owner’s Guide to the New Normal

What’s your most pressing priority right now? This interactive guide will walk you through the process of assessing your business priorities and provide actionable insights to bring them to fruition. You can also take the self-assessment to help you get started on planning your next steps.

Business Solutions with Life Insurance

Business Solutions with Life Insurance

How can whole life insurance protect your business and reward and retain your key employees?

 

Have A Question About This Topic?







Thank you! Oops!

Tax-Advantaged Health Care Planning for Retirement

Heading into retirement with confidence is easier if your planning includes steps to minimize taxes, especially as it relates to health care planning.

Can Group, Private Disability Policies Work Together?

Loss of income from disability has the potential to cause financial hardship. Disability insurance can help.

A Penny Saved is Two Pennies Earned

Here are some simple and inexpensive energy-saving tips that may help you save money.

View all articles

How Much Home Can I Afford?

With a few simple inputs you can estimate how much of a mortgage you may be able to obtain.

Impact of Taxes and Inflation

Estimate the potential impact taxes and inflation can have on the purchasing power of an investment.

What Is the Dividend Yield?

This calculator helps determine your pre-tax and after-tax dividend yield on a particular stock.

View all calculators

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

Long-Term-Care Protection Strategies

The chances of needing long-term care, its cost, and strategies for covering that cost.

Principles of Preserving Wealth

How federal estate taxes work, plus estate management documents and tactics.

View all presentations

Once Upon a Goal

Do you know how to set up your financial goals for success? This knight does.

Retirement Redefined

Around the country, attitudes about retirement are shifting.

Estate Management 101

A will may be only one of the documents you need—and one factor to consider—when it comes to managing your estate.

View all videos