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Charitable giving can bring tremendous satisfaction to both the beneficiary of your gift and to you, the giver. However, knowing where to direct your philanthropy and place your trust can be difficult. There are thousands of nonprofit organizations in the country, and thousands of other international causes that may benefit from your support.
Even if you know where you want to direct your charitable giving, it can be confusing to determine the best way to make your gift. What assets should you donate? What are the tax implications?1
Charitable giving can be most effective when it is done as part of an overall financial plan. That way, you can engage in meaningful philanthropy without diminishing assets needed for personal and family security. Here are some tools to get you started. You may want to contact a professional to help you understand your options and identify the best course of action.
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Getting started!
1. Assess your current financial situation and long-term financial
goals.
2. Identify your philanthropic objectives.
3. Understand your options for strategic philanthropic giving.
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| For more help with Charitable Giving, contact the Private Client Group |
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1. Assess your current financial situation and long-term financial goals.
To integrate your charitable giving plan into your overall wealth management objectives, review these things:
- Current cash flow needs
- Your tax situation1
- Future needs: retirement funding, education funding, etc.
- Your current charitable giving activity: amounts and methods
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| For more help with Financial Planning, contact the Private Client Group |
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2. Identify your philanthropic objectives.1
Whether your passion is education, the arts, the less fortunate or some other important cause, you want to be strategic about your charitable giving. Take some time to think about what you want to accomplish with your philanthropy.
- Support a wide range of nonprofit organizations
- Support one or two organizations that have special meaning to you
- Create opportunities for education through a scholarship fund
- Participate in giving programs that are well established and operated by a trusted organization
- Establish your own charitable trust or foundation and direct its activity
- Instill the value of philanthropy in your children and grandchildren
- Create a legacy that perpetuates the family name
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| For more information about how we help Philanthropists, contact the Private Client Group
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3. Understand your options for strategic philanthropic giving.1
Finding the best vehicle for making charitable contributions will depend upon several factors, including your current cash flow needs, tax situation, estate planning goals and personal preferences. Here are some options to consider. Trusted legal and tax professionals can help you understand the features and benefits of each option.
- Outright gift or gift by will
- Charitable Remainder Trust
- Charitable Lead Trust
- Charitable Gift Annuity
- Private Foundation
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| For more help with Charitable Giving Strategies, contact the Private Client Group
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When does it make sense to create a private foundation?1
For many families, creating a foundation or supporting organization is an effective way to channel their philanthropic activities and maintain maximum control of how their contributions are used. Private foundations can be created for a specific purpose or a broad mandate, and are typically established to maintain or aid social, educational, charitable, religious or other activities serving the common welfare.
A private foundation:
- Helps to establish a family's legacy by perpetuating the family name
- Provides a tax deduction now by funding future giving, making it an effective entity for deferred giving
- Can be created as a trust or a corporation
- Can be created for a limited duration or in perpetuity
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| While a private foundation requires that someone handle day-to-day administration, tax, reporting and other tasks, it need not be the donors or their families who are burdened with this chore. With a knowledgeable financial services partner to attend to the details, you can find tremendous pleasure in creating and managing a family foundation.
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| For more information about Foundations, contact the Private Client Group
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Charitable Giving Glossary1
- Charitable Lead Trust — Provides for ongoing donations to your favorite causes while preserving assets for your beneficiaries when the term of the trust ends.
- Charitable Remainder Trust — Provides an ongoing income stream for your personal use or for a designated individual beneficiary, while preserving assets for a specific charity or class of charities when the term of the trust ends. Frequently the grantor reserves the right to change designated charities, which allows greater flexibility.
- Charitable Gift Annuity — Provides a lifetime stream of fixed income payments for the donor or others, while creating a future significant gift to a specific philanthropic or educational organization.
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| NOT A DEPOSIT |
NOT FDIC INSURED |
MAY LOSE VALUE |
NOT BANK GUARANTEED |
| NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY |
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This information provided represents the opinion of U.S. Bank and is not intended to be a forecast of future events, a guarantee of future results, or investment advice. It is not intended to provide specific advice or to be construed as an offering of securities or recommendation to invest. Investors should consult their investment professional for advice and information concerning their particular financial situation.
1 This discussion is intended to be informational only and is not exhaustive or conclusive. U.S. Bank and its representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.
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