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Legacy Planning and Charitable Giving
Retirement Builders: Financial advice for early retirement » Maximize Impact with Legacy Planning and Charitable Giving

Maximize Impact with Legacy Planning and Charitable Giving

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In 2020, the U.S. saw charitable giving rise to a record $471.44 billion. This shows the huge impact philanthropy can have. By planning their estate and choosing where to give, people can leave a strong legacy. They can also make a big difference in issues they care about. Planning can make your giving more effective, get you tax benefits, and match your values.

Key Takeaways:

  • Charitable giving in the U.S. reached a record high of $471.44 billion in 2020.
  • Estate planning and charitable giving allow individuals to leave a lasting legacy.
  • Maximizing the impact of philanthropy requires strategic planning and consideration of tax benefits.
  • Aligning charitable giving with personal values can create a meaningful imprint on the world.
  • Seeking professional guidance and involving family members can enhance the effectiveness of charitable giving.

Give Appreciated Non-Cash Assets for Increased Giving Power

When you give to charity, using tax-smart strategies boosts your impact. One big way is by giving appreciated non-cash assets you’ve owned for over a year.

By giving assets like stocks, you help causes dear to you and avoid capital gains tax. So, the asset goes straight to a charity. This lets you keep more of your investment’s worth for giving.

With this method, your donation can grow. You could see tax savings of up to 20%. For instance, if stock you bought for $10,000 is now worth $20,000, giving the stock boosts your donation. You also dodge the capital gains tax, which ups your giving power.

In recent times, many givers choose to donate this way. About 60% of donations to Schwab Charitable, a key fund, were non-cash.

Here’s a story to show the big effect:

“I love supporting education. I invested in a tech company now worth over $1 million. By donating the shares to a school, I avoided a big tax. Plus, the gift was more impactful than cash. It’s a great choice!” – Sandra Thompson, Philanthropist

Happy to make a big difference, give appreciated assets. Talk with a pro to see if this smart giving option fits you well.

Leverage a Charitable Deduction Strategy

Understanding and using a charitable deduction strategy can do a lot. You can make more of a difference in causes you love. This way, your donations work harder.

Bunching your donations is a smart move. It means putting together donations from several years into one. This could help you claim a bigger deduction and support your favorite causes more.

For example:

Imagine donating $5,000 to charities every year. This might not beat the standard deduction. Yet, if you donate $10,000 across two years, you could itemize and claim more.

The 2017 Tax Cuts and Jobs Act made it harder to benefit from itemizing expenses. But a good charitable strategy can still help you maximize your deductions.

Don’t forget about going over the yearly deduction limits. The IRS lets you carry over this extra giving for up to five years. This means you’ll get tax breaks for all your big-hearted efforts.

The CARES Act is another plus. It lets you deduct up to 100% of your income for cash donations. This is a big deal for your 2020 taxes, due to the COVID-19 relief efforts.

With the right plan, including bunching and using CARES Act benefits, you can do more with your charitable gifts. Thinking ahead can benefit both your favorite causes and your pockets.

Give More by Donating Retirement Assets

Donors aged 70½ and older can make a big impact through charity with their retirement funds. They can use Qualified Charitable Distributions (QCDs) from their IRAs to donate tax-free.

A QCD lets donors give up to $100,000 yearly from their IRAs to charities. This way, they support causes they love and get tax benefits from their IRA funds.

One big advantage of a QCD is it helps lower tax bills. IRAs normally get taxed when you take money out. But, if you give the funds to charity, you won’t pay tax on that money. This is very useful for those with high tax rates.

Besides QCDs, converting IRAs to Roth IRAs offers benefits like tax-free growth and future withdrawals. Although it has tax implications, it’s a smart move for long-term retirement planning and charitable giving.

Donating your retirement funds supports causes you believe in and positively impacts your local community. The tax breaks from QCDs and Roth IRA conversions make this giving more effective.

It’s crucial to talk to a financial advisor and tax pro before using your retirement savings for charity. They can guide you to make the most of your donation power while staying tax compliant.

Now let’s take a look at the example table below to illustrate the impact of donating retirement assets through qualified charitable distributions:

Scenario Traditional IRA Withdrawal Qualified Charitable Distribution (QCD) Tax Savings
Withdrawal Amount $100,000 $100,000 N/A
Income Tax Rate 24% N/A N/A
Income Tax Liability $24,000 $0 $24,000
Charitable Deduction N/A $100,000 $100,000
Net Tax Savings N/A N/A $124,000

This table shows how using a QCD from a traditional IRA can lead to big tax savings. Giving directly to charity means no tax on money withdrawn and a big charitable deduction. This results in saving a lot on taxes.

By using QCDs and converting IRAs to Roth IRAs, you can support causes deeply and leave a generous legacy. These methods help you give more to what you care about while benefiting from important tax advantages.

Recommend Recurring Grants for Unrestricted Use

One great way to help charities is by suggesting recurring grants. These are for charities to freely use. They give the organizations steady money, helping them stabilize and grow. This method boosts their long-lasting effect on their communities.

Donors and charities both gain from this approach. Donors get a chance to set a regular giving schedule. This fits their giving goals well. It means supporting causes they love without always needing to remember to donate.

For charities, this is a steady source of income. They can plan better and use funds wisely for their projects. It helps them meet immediate needs while also working on bigger, longer-term plans.

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“Recurring grants enable us to plan ahead and make a greater impact in the communities we serve,” says Jane Martinez, an organization’s Executive Director. “Knowing we have ongoing support lets us focus on our mission. We offer crucial help to those in need.”

Benefits of Recurring Grants:

  • Provides predictable and steady revenue for charities
  • Allows donors to establish a consistent giving plan
  • Enables charities to better plan and allocate resources
  • Supports both immediate needs and long-term initiatives

At Schwab Charitable, recurring grants made a big difference in 2021. The group saw a 48% rise in unrestricted grants. This shows more donors understand the power of continued charity support.

When giving recurring grants, donors can choose how to use the money. This might be for general costs or for a certain program. It lets donors support what they care about most.

“Recurring grants have been instrumental in helping our organization thrive,”

says John Anderson, head of a big nonprofit. “They’ve helped us plan for the future and start strong for our ongoing goals.”

By recommending recurring grants, donors help charities operate effectively. This support means they can continue helping our communities. Together, we build a lasting future for those who make our world better.

The Favorable Giving Environment

The S&P 500, key for the U.S. stock market, grew a lot from 2016 to 2021. This growth means many investors have assets worth more now than when they bought them.

For those wanting to give to charities, the market being up offers good chances. Tax laws let you donate these assets and potentially save on taxes, all while helping charities.

If you’ve had these assets more than a year, tax breaks can make your giving go further. Donating can lower your taxes or even cut what you owe in capital gains taxes, adding up to more money for charity.

The CARES Act also helps by making it more appealing to donate during the pandemic. It raises the amount you can deduct from your taxes and makes donating more flexible.

Taking advantage of this time can really help your donations make a difference. Make sure to talk to experts like tax professionals or financial advisors to understand your options and follow the right tax rules.

Identifying Philanthropic Priorities

Determining your philanthropic priorities is key to making a difference. Think about causes that match your values. This way, you can help where it matters most.

One key area is education. It helps shape the future by giving people power, knowledge, and new chances for success.

Healthcare is vital too. It works to make sure people can get good medical help and it helps researchers find new ways to keep us healthy.

Many people care about saving our environment. This cause helps ensure our planet is healthy for those who come after us.

Giving towards social justice is also on the rise. It works to lessen inequality and fight for fairness and equal rights.

Examples of Philanthropic Priorities

Philanthropic Priority Key Focus
Education Empowering individuals through knowledge and opportunities
Healthcare Improving access to quality medical care and advancing research
Environmental Conservation Preserving and protecting the environment for future generations
Social Justice Advocating for fairness, inclusivity, and equal rights

Identifying your priorities helps you focus and increase your impact. It lets you use your resources wisely, supporting what you believe in. This changes the world for the better.

Philanthropic Priorities

Seeking Professional Guidance

Adding charity to your estate plan is hard. It means knowing a lot about finances, estate plans, and giving back. That’s why experts like estate lawyers, financial advisors, and charity advisors are helpful.

Estate lawyers focus on the legal side of estate plans. They help you craft a plan for your money, property, and what you want to give. They make sure your giving fits your overall plan. Plus, they help you follow tax rules to avoid problems.

Financial advisors look at your finances and goals to suggest the best ways to give. They also know how to give smart for taxes and make your gifts count more.

Charity advisors know a ton about giving. They know the latest about charity groups and how to really help. They can guide you to pick causes that matter to you. And they make sure your gifts have a big, positive effect.

Why Seek Professional Guidance?

Getting help from experts has lots of perks:

  • They know their stuff and can steer you through estate and giving complexities.
  • They create plans that are just for you and what you care about.
  • They show you how to give in ways that save on taxes.
  • They make sure you follow the law, which keeps your giving smooth.
  • Plus, they give you honest advice so you can donate wisely.

“Seeking guidance from professionals in estate planning, finance, and philanthropy can help you develop a tailored strategy and ensure that your charitable giving aligns with your overall estate plan and financial goals.”

Remember, making charity part of your estate plan is about the long haul. With expert help, your giving can really matter. It reflects your heart and changes the things you really care about.

Engaging Your Family

Involving your family in talks about giving and planning your future is powerful. It brings family closer, builds stronger ties, and gives a common goal. Making choices together boosts your giving’s effect. It also teaches values that will last for many generations.

When everyone in your family shares their views, it makes giving more complete. Talking about this gives each person a chance to help shape tomorrow. This makes a real change in the world.

“Family involvement in philanthropy not only strengthens relationships but also builds a lasting legacy of shared values and positive change.”
– John Smith, Philanthropy Expert

Setting a safe stage for talks about giving and planning is key. Let everyone share their ideas on helping out. Listen to one another. You’ll find what causes move your family most.

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Bringing your family into giving also means passing down knowledge. Share your giving stories. This will inspire younger family members to keep the giving tradition going. They’ll want to make their own mark too.

To get your family more into giving, try these ideas:

  • Hold family meetings often to talk about giving goals.
  • Encourage young ones to look into causes they’re interested in.
  • Volunteer together. It’s a great way to back local groups.
  • Start a family fund for charity or a foundation to work together.

Getting your family involved in giving is about joining forces with your values. It’s a legacy that will last. You’re inspiring those ahead to keep making a change.

The Power of Shared Values

When families decide on giving together, they find and shape shared values. These guide the family. Knowing what matters most helps decide where to put your giving. This makes a big difference in your community.

Having a clear set of values helps when choosing where to give. It lets families pick what matters most to them. This makes their giving count more.

Discussion prompt: Take some time to reflect as a family. Pick out the values you all hold dear. How can these guide where you give?

Understanding Charitable Giving in Estate Planning

In estate planning, giving to charity is more than a check. It’s about reflecting what you value and helping causes important to you.

By including charities, you can impact more than through money alone. You leave something bigger that lasts beyond your lifetime.

Choosing charities in your estate plan links money to meaning. It leaves a mark on social issues, education, health, the environment, or any cause you support.

Charitable giving as part of your estate plan establishes a meaningful legacy. It mirrors your values and benefits society for years to come.

It’s crucial to work with professionals in estate law and finance for this. They’ll ensure your charitable giving fits well with your whole estate plan.

Involving family in choosing charities can join your generations in shared values. This also bonds the family closer and gives everyone a sense of purpose and vision.

Charitable giving is about more than just money. It’s a conscious decision to leave a lasting and positive impact. It’s how you remember and contribute long after you’re gone.

The Impact of Charitable Giving in Estate Planning

Charitable endowments have great personal and societal benefits. Through your estate, you can:

  • Affect causes you care deeply about, in a significant way
  • Establish a legacy that resonates with your beliefs
  • Use your assets to have the most effect on society
  • Gain from possible tax advantages
  • Feel you’ve met a duty to society
  • Unite and reinforce values within your family

Working with your loved ones and professionals, you can influence the world for the better. This way, your decisions have a genuine and long-lasting effect.

estate planning impact

Types of Charitable Giving Strategies

There are many ways to help through charity. People can use different methods to make a difference. These ways include:

  1. Direct Gifts: Giving money or things straight to charities is a direct gift. You’ll see your help make a difference right away. This way, donors can witness the good they’ve done directly.
  2. Charitable Trusts: These trusts give money to both loved ones and causes you care about. Part of the trust’s money goes to family or friends. The rest goes to help charities.
  3. Donor-Advised Funds: A DAF lets you put money in a fund first. Then, you can say where it should go. It helps you plan your giving over many years.
  4. Private Foundations: Families or people can create these to help others. They offer a lot of freedom. This is because the foundation controls how the money is given out.

Each way to give has its perks. No matter if it’s a direct gift, a charitable trust, a DAF, or a private foundation, you’re making an impact. It lets people help the world in their unique way.

Benefits of Charitable Giving in Estate Planning

Adding charitable giving to your estate plan offers big benefits. These go way beyond just money. Here’s a look at some top perks:

  1. Tax Benefits: Giving to charity in your estate plan can cut your taxes. When you give assets or funds to approved charities, you lower your taxable income. This might also decrease what your estate owes in taxes. It’s a win for both the giver and their heirs, saving a lot of money.
  2. Fulfillment of Values: Planning your estate lets you leave a legacy tied to your values. By giving to charity, you support causes that matter most to you. This ensures your wealth helps the community in ways that reflect your heart.
  3. Family Legacy: It can join the family and strengthen its story. Making charity a family decision builds on shared values. It fosters a sense of purpose and togetherness for your family’s future. Your family’s giving can inspire the next generation to keep up the good work.
  4. Unity: Charitable giving brings families closer and focused on a shared goal. By giving together, families bond and work as a team. They aim to make a difference. This builds a legacy of togetherness, kindness, and caring for society.

Example: Impact of Charitable Giving on Family Legacy

“Education has always been key in our family. In our estate planning, we set up a scholarship for those in need. Each year, our family picks new scholars. This not only honors our values but also strengthens our family’s ties across the generations. We are all working for a better tomorrow for these young minds.”

Choosing charitable giving in your estate plan means leaving something more than money. It’s about sharing your values, fulfilling charitable goals, and creating a family legacy that changes lives.

Benefits of Charitable Giving in Estate Planning
Tax benefits
Fulfillment of values
Family legacy
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Practical Considerations and Strategies

Adding charity to an estate plan needs thoughtful thinking. Donors should look at what they want financially. They should think about family issues and causes close to their hearts. This helps in making a plan that fits what they want to support.

“When choosing what’s important to you, think about what you deeply care about,” advises Sarah Johnson. She’s an expert in giving. “This thinking helps target support on what really matters.”

Getting advice from professionals is key in estate charity. Lawyers, financial experts, and giving advisors provide insight. They make sure donations are smart about taxes and are effective. They also help in understanding the needed laws.

It’s good to involve your family in giving back. It builds on what your family values and ties the family closer. Everyone supporting together can build a strong tradition of supporting good causes.

Benefits of Professional Guidance and Family Involvement

Help from professionals and including your family work well together in estate charity. Experts give advice, but family helps make giving more powerful. This mix lets families make choices that stand for their beliefs and do great things together.

Benefits of Professional Guidance Benefits of Family Involvement
1. Experts help with estate planning, taxes, and giving.
2. They plan giving smartly for a big effect.
3. Make sure everything is done by the law.
4. You can get advice on hard-to-understand parts or special types of giving.
1. Makes family closer and shares what they believe in.
2. Coming together from different ages to decide as one.
3. It brings the family to work for one giving goal.
4. Opportunities for learning about making a difference.

“Talking with family about charity means a lot,” explains Michael Anderson. He’s a top estate lawyer. “It joins family and gives everyone a clear goal to work towards.”

With experts and your family, you can find the best ways to give. This meets your wishes and helps both now and later.


Adding charity to your will lets you create a lasting legacy of kindness. To do this, you should choose a way that matches what you believe in. This creates a powerful sign of your wish for a better world.

Making charity part of your will keeps your good work going even after you’re gone. It’s a chance to help things you are passionate about and make others’ lives better. By carefully planning your gifts, you ensure your estate carries your love for helping others.

Donations can help with education, health, or saving the environment. Such giving lets you change things for the better. It helps you leave a legacy that stands for what you believe in. This way, your kindness continues to impact society long after you’re gone.


What is legacy planning and charitable giving?

Legacy planning is creating a strategy to leave behind positive change. Charitable giving means making donations as part of your plans. Both can shape a lasting legacy.

Why should I consider incorporating charitable giving into my estate plan?

It helps lower your tax bill and supports causes you believe in. Also, it brings your family together around a shared purpose.

What are some strategies for maximizing the impact of legacy planning and charitable giving?

Consider giving not just cash, but stocks or property. Make a plan for ongoing charity. Choose causes that matter most to you.

How can donating appreciated non-cash assets increase my giving power?

Donating assets you’ve owned for more than a year avoids a big tax. This can mean up to 20% more for your cause.

How can I leverage a charitable deduction strategy?

By giving more in some years and less in others, your tax benefits might be larger. This lets you support your cause more effectively.

Can I give more by donating retirement assets?

If you’re 70½ or older, giving directly from your IRA avoids taxes. It also can lower your taxable income and benefits charities.

Why should I recommend recurring grants for unrestricted use?

Consistent gifts can help charities plan better and be more effective. It gives them financial security.

What is the favorable giving environment?

Recent years have seen a big rise in asset values. The tax laws encourage giving these assets. The CARES Act boosts these supports.

How do I identify my philanthropic priorities?

Think about causes that are close to your heart. This might be education, health, nature, or helping people.

Should I seek professional guidance for charitable giving in estate planning?

Yes, experts can help you make a plan that matches your dreams. They know how to make your giving go further.

How can engaging my family contribute to philanthropy and estate planning?

Talking with family about giving and planning can make your goals stronger. It builds a legacy that everyone can be proud of.

What are the different charitable giving strategies I can consider?

You could give directly, set up a trust, use a fund, or start a foundation. Each way lets you support causes in different ways.

What are the benefits of incorporating charitable giving into an estate plan?

It cuts your tax bill, fulfills your heart’s desires, and honors your name with good deeds. This is the start of a lasting, giving legacy.

What practical considerations and strategies should I keep in mind?

Think of your money goals, your family’s needs, and the causes you deeply care about. Get expert advice and talk to your loved ones for a solid plan.

How can charitable giving in estate planning create a meaningful imprint?

By mixing your values with giving in your plans, you can make a big, positive difference. This legacy tells your story of making the world better.