CommentaryOctober Commentary

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Are You Making the Most of Your Charitable Gifts?

Are you making the most of your charitable gifts? The world needs your personal and financial contributions more than ever. Do you plan for it, or do you just give money and time when you can and to whomever pops up? Have you considered putting together a more comprehensive plan? We love to do this with our clients! How do you even start with a charitable plan? Let us start with our example, and then walk you through how you can start your own.

In 2004, we were 2 years into our business.  As business owners, we were getting pulled in all directions to support, in both time and treasure, various non-profits and organizations in the community. It was frustrating, as we couldn’t do it all. We decided to hit pause and do some research. We discussed our values, and decided we wanted to focus on women and children, economic and education issues, and stay local. From there, we toured organizations, looked at their boards and leadership, their impact, and how much of their resources were going to service versus administrative costs. We looked at what opportunities they had that would fit with the crazy schedules of two working moms. For us, Operation Breakthrough was a slam dunk. And from there, the rest is history. We have been supporting them ever since as our primary corporate non-profit beneficiary. As we have grown, we still give smaller amounts of time and money to other organizations (much that has to do with our own kids!), but the vast majority of our charitable efforts still go to Operation Breakthrough.

Each year, we decide if “OB” is still number one in our hearts. We then create a financial budget for how much we are going to give. We check with them to see where their greatest needs are. Occasionally, their needs also offer up special state tax credits, as they did last year. That’s important to know, because the next step is to set a charitable budget for the year. Tax credits can increase what we give. We decide how to give- a direct gift, a gift of stock, or through a Donor Advised Fund.  Then we look for time opportunities. We love bringing the ice cream truck each year for the kids and teachers. But they also need various volunteers for projects, and we can fill them with our families, friends and sometimes even clients who want to engage. We book that time on the calendar, just like we plan a budget for the year. Some of us have even taken a further step to include them with our estate planning.

How do you create your own? Here are the steps we would recommend as you process (again, we love talking this through with our clients!):

  • What are YOUR values? Where are the needs that really move you personally? Literacy? Animals? Environment? If you aren’t passionate about any one thing, what are you curious about?
  • If you are already passionate, start researching organizations that fit your mission. Go as deeply as you can before you choose. If you are simply curious, research, but you will want to baby step into the organization, until you are committed to the cause. Give a little time and possibly a small amount of money before committing to anything long term. Get to know the people and the systems, while researching them in depth.
  • After you get involved, make sure it’s what you thought. If it’s not, there is nothing wrong with backing out and finding something else. Just start over! Similarly, some people make an impact for years, and then have a shift in priorities (or the organization shifts), and they need to make a change. It’s ok- you can begin again with something else- no guilt.
  • Once you pick an organization (or more than one, in some cases), plan a budget for your financial gifts. If there are still other causes you want to support, make sure you leave some of your charitable budget for them. If you have multiple organizations that you are focusing on, each year, split up gifts as a percentage of your budget, depending on your focus and the needs of the group that year. For example, if your church is having a capital campaign, you may want to allocate more to them in a given year, but then pull back to reallocate in a different year.
  • Once you know how much, consider how you want to give. Writing a check is a quick answer, but it may be more beneficial for you to give stock or appreciated assets, or under certain conditions, people over 72 can give directly from their IRA. Some organizations need your stuff- Kelly and Stephanie have both donated their used cars to Operation Breakthrough. Each family that was the beneficiary of this gift had their lives changed. Of course, you want to check with your tax advisor about any giving you do.
  • Your time is just as valuable as your money in many circumstances. Plus, if you are giving your time, you can see just how your financial gift is used and where the needs are. If so inclined, find ways to plug into the organization. Make a time commitment so they can count on you. Get to know the staff, and maybe get friends involved, if appropriate, to increase your impact and your fun.
  • Finally, think about long term gifts. This can be charitable planning in your estate planning, but it could also be something as simple as a Donor Advised Fund at the Community Foundation.
  • We are so inspired by The Giving Pledge- an organization that recruits the VERY wealthy to give the majority of their wealth away to charity. While your beneficiaries may need some of your wealth, will they need it all? If the answer is no, think about (and talk about it with that next generation) how you may want to make that impact. A multi-generational charitable giving plan can impact the community and save tax dollars, if done well.
  • A Donor Advised Fund can be used while living and to continue your charitable legacy after you pass. It can be funded slowly over time, or all at once- which can reap possible tax benefits. It can bring families together after the original funder has passed. It can also be an incredible simplifier for those people who want to support multiple organizations each year, including small gifts.
  • Finally, review this plan often- every year. You want to make sure your impact is meaningful, simple, and still brings you joy. Staying on top of what you are doing, how you are doing it, and why you are doing it, will make you that much more dedicated to your cause.

If you want to discuss this, it’s the perfect time of year to get on it. As always, we’re here to help.

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The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Disclosures/CRS FORM

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The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Important Disclosures

Insights for Your Life Stage

The Planned Approach, Inc. is an Investment Advisor registered with the Securities and Exchange Commission. No client or prospective client should assume that any information presented or made available on or through this website, is a receipt of, or a substitute for personalized financial planning consulting advice. Financial planning consulting advice can only be rendered after the following conditions are met: 1. Delivery of our Form CRS, Form ADV Part 2A and 2B to you; 2. Execution of an Investment Advisory and/or Financial Planning Engagement Letter between us. You may obtain a copy of our ADV Part 2A Disclosure Brochure containing similar information by sending a written request to The Planned Approach, Inc., 420 W. 98th Street, Kansas City, MO 64114. Additionally, please note that hyperlinks included throughout this site are provided as a matter of convenience and we disclaim any and all responsibility for information, services or products found on websites linked hereto. Please contact the firm for further information. The Planned Approach, Inc. is not engaged in the practice of law and does not provide legal advice. Always consult with an attorney regarding your specific legal situation. The Planned Approach, Inc. is not engaged in the practice of tax consulting. Always consult with your tax advisor regarding your specific tax situation.