To make a meaningful difference with your charitable giving, you need more than good intentions – you need a strategy. Aligning donations with your core values not only gives you a sense of fulfillment but also ensures that your contributions have the greatest impact. Creating a philanthropic strategy helps you maximize the effectiveness of your charitable efforts.
Scrutinize Organizations
Before donating to a charity, do your homework to ensure your contributions are used as intended. For example, I once helped a couple who were planning to support a school, only to find a significant tax lien that would have nullified their donation. In another case, a client wanted to donate money for new books at a library, but the funds went unused because the library lacked bookcases. Clear communication between you and the organization, along with professional guidance, is essential into ensure your donation achieves its intended purpose.
Financial Benefits of Giving
Did you know that if you follow the regulations closely, your required minimum distributions (RMDs) from your Individual Retirement Accounts (IRAs) can be directly donated to charity, reducing taxable income and maximizing the impact of the donation. Also, new rules in Israel allow individuals to donate appreciated assets to charity, offering extra tax benefits. Be sure to consult your tax advisors for personalized advice.
Inspired by philanthropist Howard Jonas, my wife and I learned the importance of increasing our donations. Following the example of the Jonas family, we strive to donate 20% of our income to tzedakah. We ensure that the organization’s goals align with our core values by investigating directors, meeting program leaders, and receiving regular reports on fund usage.
Build a Philanthropic Legacy
Creating a legacy of giving involves more than just finances; it means instilling values of generosity and responsibility within your family. Encourage open discussions about your family’s philanthropic goals to ensure your children understand and are inspired by your example. To motivate our children to give, we match their donations if they thoroughly research the organization.
Action Steps for Savvy Giving
- Engage in Conversations: Align donations with your core values.
- Perform Due Diligence: Diligently investigate the organizations you support
- Involve Professionals: Seek advice about donating appreciated stocks and giving your RMDs directly to charities.
For assistance in maximizing your charitable donations from your IRA accounts or donating appreciated stock, call the office at 02-624-2788.
Douglas Goldstein, CFP® is the director of Profile Investment Services, Ltd. www.Profile-Financial.com. He is a licensed financial professional in the U.S. and Israel. Call (02) 624-2788 for a consultation on setting up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published August 27, 2024.