Philanthropic Giving – A Quick Probe into the Different Aspects of Financial Planning

The charitable giving trend has become more prevalent among Gen Y and Z investors than baby boomers. They want to contribute toward effective causes that resonate with their values and financial aspirations. However, proper financial planning is required due to the complexities of the matter. Typically, people donate funds or assets to a specific university or organization. While one-time giving without premeditation is alright, your ability to substantially impact will be reduced or limited in the long run. That's why one must think through their actions before proceeding. Your wealth and liquidity can be invested in the right places to leverage them when the time for donation comes.

Studies suggest that 59% of young investors want their advisors to guide them about philanthropy beyond investment and financial management. To protect mental peace during charitable activities, you can also approach financial advisors like Harding Financial Group for help. Their support can make this part of your life easygoing. Let's delve some nitty-gritty quickly.

·         Asset and cash donation

People typically consider cash for donations. However, large and sophisticated charities may benefit more from appreciable assets, which can help them create wealth and expand their altruistic or selfless services. That's why you can also gift them investment products like securities.

·         Estate planning

Many charitable organizations can benefit from donors’ will. Your estate can help them access cash, portfolio assets, real estate, and other property types. Due to this, some donors choose their preferred charitable groups as beneficiaries of their life insurance. You can consolidate your estate planning in order to make an excellent philanthropic investment for a worthy cause. Your financial advisor can show you the proper path in this direction.

·         Philanthropy optimization

Tax deductions help you save money instead of adding wealth. But it doesn’t mean you should ignore this. Retired people can refer to qualified charitable distributions (QCDs) to make their required minimum distributions (RMDs) tax-free. They can show donations in their retirement portfolio to save on portfolio taxes. You may wonder why one should consider tax benefits when planning a donation. It allows you to increase your giving. Extra contributions can decrease your tax rates. At the same time, prioritizing any asset for donation without considering tax implications may lead to high capital gains taxes.

 

 

·         Additional information

You must have realized that proper planning can make your philanthropic endeavors more meaningful and long-lasting. Allow financial advisors to evaluate your assets, earnings, and liabilities to help you donate according to your financial capacity. They can make your contribution plan foolproof with short- and long-term goals. A suitable timeline will be created for donations to make your efforts sustainable. At the same time, some financial services companies can connect you with charitable organizations that match your interests. Professionals ensure your donations help the impactful causes.

You can make your philanthropic work count with the support of the financial advisors. Expect them to guide you about bunched donations, asset selection, donor-advised funds, qualified charitable distributions, etc. Many people fail to make a long-lasting impact through their contributions because they lack clarity. You can do things differently by taking the planned approach.